Atara Biotherapeutics Announces 1-for-25 Reverse Stock Split
Atara Biotherapeutics (Nasdaq: ATRA) announced a 1-for-25 reverse stock split, effective June 20, 2024, to regain Nasdaq compliance and enhance share value. This split reduces the outstanding common stock from 122,606,575 shares to 4,904,263 shares. It does not impact authorized shares or par value. Adjustments will be made to equity awards and incentive plans. Stockholders will automatically see adjustments in their brokerage accounts, while those holding certificates will receive instructions from Computershare Trust Company. Fractional shares will be compensated in cash.
- Reverse stock split aims to regain compliance with Nasdaq's $1.00 minimum bid price.
- Effective date is June 20, 2024, ensuring prompt action.
- Reduces the number of outstanding shares significantly, potentially increasing per-share value.
- Stockholder approval indicates support for the move.
- No impact on the number of authorized shares or par value per share.
- The reverse stock split indicates previous share price issues.
- Potential shareholder dilution if perceived as a negative market signal.
- Cash compensation for fractional shares implies administrative costs.
- May not guarantee long-term share price stability or compliance.
Insights
The announcement of a 1-for-25 reverse stock split by Atara Biotherapeutics is a significant corporate maneuver primarily aimed at regaining compliance with the Nasdaq minimum bid price requirement. A reverse stock split decreases the number of shares outstanding, theoretically increasing the stock price proportionately. For retail investors, it’s important to understand that this move does not change the overall value of their investment but does alter the number of shares they hold.
On the positive side, meeting the Nasdaq listing requirement is important for maintaining liquidity and supporting institutional investment. Reverse splits are often seen in a negative light as they can signal underlying financial struggles, but in this case, it may be a strategic step to stabilize the stock price and restore market confidence.
Short-term, investors might witness an initial boost in the stock price due to speculative buying or renewed interest. Long-term benefits depend on the company’s ability to leverage its T-cell immunotherapy platform effectively. Investors should monitor follow-up developments, such as financial health indicators and clinical trial progress, as these will be critical in determining the sustained impact of this reverse split.
For retail investors, understanding the broader market implications of this reverse stock split is essential. By reducing the number of shares from approximately 123 million to around 5 million, Atara makes its stock appear more attractive to institutional investors who often shy away from low-priced stocks. However, retail investors should be cautious as such splits can sometimes reflect desperation rather than a strategic play.
From a market perspective, reverse stock splits don’t inherently improve the fundamentals of a company. Investors should keep an eye on Atara’s ability to generate revenue from its T-cell immunotherapy platform. If the company can show tangible progress in its clinical trials or secure partnerships, the reverse split could indeed be a turning point.
Market dynamics often react to psychological elements and a higher stock price post-split can sometimes attract new investors simply due to perceived value. However, this is purely cosmetic unless substantiated by underlying business growth and results.
The Reverse Stock Split was approved by the Company's stockholders at the Company's Annual Meeting of Stockholders held on June 10, 2024 (the "Annual Meeting") to be effected at the Board's discretion within approved parameters. Following the Annual Meeting, the final ratio was approved by the Company's Board on June 10, 2024.
The Reverse Stock Split reduces the number of shares of the Company's outstanding common stock from 122,606,575 shares to 4,904,263 shares, subject to adjustment due to the payment of cash in lieu of fractional shares. This does not include the Company’s outstanding 32,153,085 pre-split (1,286,123 post-split, subject to adjustment due to payment of cash in lieu of fractional warrants) pre-funded common stock warrants as of the Effective Time. As a result of the Reverse Stock Split, proportionate adjustments will be made to the number of shares of the Company's common stock underlying the Company's outstanding equity awards and the number of shares issuable under the Company's equity incentive plans and other existing agreements, as well as the exercise or conversion price, as applicable. There will be no change to the number of authorized shares or the par value per share.
Information for ATRA Stockholders
As a result of the reverse stock split, every 25 pre-split shares of common stock outstanding will become one share of common stock. The Company's transfer agent, Computershare Trust Company, N.A., will serve as the exchange agent for the reverse stock split.
Registered stockholders holding pre-split shares of the Company's common stock electronically in book-entry form are not required to take any action to receive post-split shares. Those stockholders who hold their shares in brokerage accounts or in "street name" will have their positions automatically adjusted to reflect the reverse stock split, subject to each broker's particular processes, and will not be required to take any action in connection with the reverse stock split. Stockholders holding shares of the Company's common stock in certificate form, if any, will receive a transmittal letter from Computershare with instructions as soon as practicable after the effective date.
No fractional shares will be issued in connection with the reverse stock split. Stockholders who otherwise would be entitled to receive fractional shares will receive a cash payment in lieu of such fractional shares.
About Atara Biotherapeutics, Inc.
Atara is harnessing the natural power of the immune system to develop off-the-shelf cell therapies for difficult-to-treat cancers and autoimmune conditions that can be rapidly delivered to patients from inventory. With cutting-edge science and differentiated approach, Atara is the first company in the world to receive regulatory approval of an allogeneic T-cell immunotherapy. Our advanced and versatile T-cell platform does not require T-cell receptor or HLA gene editing and forms the basis of a diverse portfolio of investigational therapies that target EBV, the root cause of certain diseases, in addition to next-generation AlloCAR-Ts designed for best-in-class opportunities across a broad range of hematological malignancies and B-cell driven autoimmune diseases. Atara is headquartered in
Forward-Looking Statements
This press release contains or may imply "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, forward-looking statements include the anticipated impact of the reverse stock split on the trading price of the Company’s common stock on the Nasdaq Global Select Market and the Company’s continued listing thereon. Because such statements deal with future events and are based on Atara’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of Atara could differ materially from those described in or implied by the statements in this press release. These forward-looking statements are subject to risks and uncertainties, including, without limitation, risks and uncertainties associated with the costly and time-consuming pharmaceutical product development process and the uncertainty of clinical success; the COVID-19 pandemic and the wars in
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Investor and Media Relations
Jason Awe, Ph.D.
Senior Director, Corporate Communications & Investor Relations
(805) 217-2287
jawe@atarabio.com
Source: Atara Biotherapeutics, Inc.
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