HANGZHOU, China - Kaixin Holdings (NASDAQ: KXIN), a Chinese new energy vehicle manufacturer, has announced a share consolidation of its ordinary shares at a ratio of 1-for-60, set to take effect on October 25, 2024. The company's shares will start trading on a post-consolidation basis on the same date at the opening of the market session. This move will result in the automatic consolidation of every sixty shares of the company's ordinary shares into one ordinary share.
The consolidation is expected to adjust the company's outstanding warrants and other equity rights proportionately. Kaixin has clarified that no fractional shares will be issued as a result of the consolidation. Shareholders who would be entitled to fractional shares will instead receive one ordinary share, rounding up in lieu of the fractional share. Shareholders with shares in electronic form at brokerage firms are not required to take any action, as the change will be reflected automatically in their accounts.
Kaixin Holdings is known for producing a range of electric passenger and logistics vehicles and is recognized for its professional teams with extensive experience in research and development, production, and marketing. The company operates production facilities capable of carrying out stamping, welding, painting, and assembly operations. Kaixin aims to build a competitive position in the international market, integrating online and offline presence and diversified business operations. It is committed to contributing to the goals of peak carbon emissions and carbon neutrality.
The Share Consolidation will see the company's ordinary shares continue to be traded on The Nasdaq Capital Market under the ticker symbol KXIN, with a new CUSIP number G5223X159. This announcement is based on a press release statement from Kaixin Holdings and includes forward-looking statements under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. The company cautions that these statements involve risks and uncertainties, and actual results could differ materially from those anticipated.
In other recent news, Kaixin Holdings, a new energy vehicle manufacturer, has been granted an extension by Nasdaq to meet its minimum bid price requirement. The company now has until December 13, 2024, to comply with the Nasdaq's Listing Rule 5550(a)(2), also known as the Bid Price Rule. To meet these conditions, Kaixin plans to hold an extraordinary general meeting on October 1, 2024, to seek shareholder approval for a reverse stock split.
Kaixin has also filed an amended 6-K/A with the Securities and Exchange Commission, modifying proposals for their upcoming Extraordinary General Meeting. The key changes include an increase in the reverse stock split ratio from 1:50 to 1:60 and amendments to the authorized share capital on a post-split basis.
In addition, the company has updated its plans for a reverse stock split and adjustments to its share capital. The company has revised the number of shares involved in the redesignation and reclassification of its share capital and increased the ratio of the proposed reverse stock split from 16:1 to a more substantial 50:1.
Despite facing potential delisting from the Nasdaq Capital Market due to non-compliance with minimum bid price requirements, Kaixin has requested an appeal hearing with a Nasdaq Hearings Panel. The company is exploring various solutions, including the proposed reverse stock split, which is subject to shareholder approval.
These are among the recent developments concerning Kaixin Holdings, which is known for its production of electric passenger and logistics vehicle models and is focusing on expanding its international market presence.
InvestingPro Insights
As Kaixin Auto Holdings (NASDAQ: KXIN) prepares for its 1-for-60 share consolidation, investors should consider some key financial metrics and insights from InvestingPro. The company's market capitalization stands at a modest $9.29 million, reflecting its current position in the competitive new energy vehicle market.
InvestingPro data reveals that KXIN's revenue for the last twelve months as of Q2 2024 was $12.68 million, with a concerning revenue growth rate of -81.46% over the same period. This significant decline in revenue aligns with one of the InvestingPro Tips, which notes that the stock has taken a big hit over the last week, dropping 7.65%.
Despite these challenges, it's worth noting that KXIN has shown strong returns over the last month and three months, with price total returns of 105.23% and 31.71% respectively. This recent positive momentum could be a factor in the company's decision to implement the share consolidation, potentially aiming to improve its market perception and attract institutional investors.
However, investors should approach with caution. An InvestingPro Tip highlights that KXIN is not profitable over the last twelve months, which is corroborated by the negative gross profit of -$23.11 million and an alarming gross profit margin of -182.25%. The company's operating income and EBITDA are also in negative territory, indicating significant operational challenges.
For those considering a deeper analysis, InvestingPro offers 12 additional tips for KXIN, providing a more comprehensive view of the company's financial health and market position. These insights could be particularly valuable as the company undergoes this significant share structure change.
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