Momentus Inc. Announces Reverse Stock Split

Rhea-AI Summary

Momentus (NASDAQ: MNTS) has announced a 1-for-14 reverse stock split of its Class A common stock, effective December 12, 2024. The split will reduce outstanding shares from approximately 31 million to 2 million, with trading on a split-adjusted basis beginning December 13, 2024 on Nasdaq under the same symbol 'MNTS'.

The reverse split was approved by stockholders on December 2, 2024. Stockholder ownership percentages will remain unchanged except for fractional shares, which will be rounded up. The company's public warrants and equity-based awards will be proportionately adjusted. This action aims to comply with Nasdaq's minimum bid price requirement of $1.00 per share and attract a broader investor base.

Positive

• Stock will continue trading on Nasdaq Global Select Market
• Potential to attract broader institutional and retail investors
• Aims to maintain Nasdaq listing compliance

Negative

• Implementation of reverse stock split indicates share price weakness
• Risk of failing to maintain Nasdaq listing requirements
• Significant reduction in outstanding shares may impact stock liquidity

Insights

Financial Analyst

This reverse stock split appears to be a defensive move to maintain Momentus' Nasdaq listing and avoid potential delisting. With a micro-cap valuation of just $17.2M, the company is implementing a significant 1-for-14 consolidation, reducing outstanding shares from 31 million to approximately 2 million. While this mechanical adjustment doesn't change the company's fundamental value, it's concerning that such an aggressive ratio was needed. The move suggests deep underlying challenges, as reverse splits are often seen as a red flag by investors. The rounding up of fractional shares could create minor technical support, but the primary focus should be on whether Momentus can address its core business challenges in the competitive space services sector. The stock's extremely low market cap indicates significant market skepticism about its future prospects.

Market Research Analyst

Reverse splits of this magnitude (1-for-14) typically signal severe financial distress and often precede further price deterioration. Historical market data shows that companies executing reverse splits frequently underperform their peers in the following 12-24 months. For Momentus, operating in the capital-intensive space infrastructure sector with a sub-$20M market cap, this move might struggle to attract the intended institutional investors. While the higher post-split price may temporarily maintain Nasdaq compliance, it doesn't address the fundamental market concerns about the company's business model and cash position. The timing ahead of year-end 2024 suggests urgency in meeting listing requirements, but investors should carefully monitor post-split trading patterns and potential selling pressure.

SAN JOSE, Calif.--(BUSINESS WIRE)-- Momentus Inc. (NASDAQ: MNTS) (“Momentus” or the “Company”), a U.S. commercial space company that offers satellite buses, transportation and other in-space infrastructure services, today announced it has effectuated a 1-for-14 reverse stock split (the “Reverse Stock Split”) of its Class A common stock (the “Common Stock”) that will become effective on December 12, 2024 at 5:00 p.m. Eastern Time. The Company’s Common Stock will continue to trade on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “MNTS” and will begin trading on a split-adjusted basis at the opening of the market on December 13, 2024. The new CUSIP number for the Common Stock following the Reverse Stock Split will be 60879E309.

The Reverse Stock Split was approved by the Company’s stockholders at the special meeting of the stockholders on December 2, 2024. As a result of the Reverse Stock Split, every 14 shares of Common Stock issued and outstanding will be automatically combined into one share of Common Stock. The Reverse Stock Split will proportionately reduce the number of outstanding shares of Common Stock from approximately 31 million shares to approximately 2 million shares and the ownership percentage of each stockholder will remain unchanged other than as a result of fractional shares. The Company’s public warrants trading on Nasdaq under the existing symbol “MNTSW,” and outstanding equity-based awards and shares or share units issued under the Company’s benefit plans, including applicable exercise prices, will be proportionately adjusted.

No fractional shares of Common Stock will be issued in connection with the Reverse Stock Split. Stockholders that would hold a fractional share of Common Stock as a result of the Reverse Stock Split will have such fractional shares of Common Stock rounded up to the nearest whole share of Common Stock.

To effectuate the Reverse Stock Split, the Company filed the Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation, as amended, which was accepted for filing by the Secretary of State of the State of Delaware on December 9, 2024. There will be no change to the total number of authorized shares of Common Stock as set forth in the Second Amended and Restated Certificate of Incorporation of the Company, as amended.

Among other considerations, the Reverse Stock Split is intended to bring the Company into compliance with the minimum bid price requirement for maintaining the listing of its Common Stock on Nasdaq, and to make the bid price more attractive to a broader group of institutional and retail investors. Nasdaq requires, among other things, that a listing company’s common stock maintain a minimum bid price of at least $1.00 per share.

About Momentus Inc.

Momentus is a U.S. commercial space company that offers commercial satellite buses, in-space infrastructure services, including in-space transportation, hosted payloads and in-orbit services.

Forward-Looking Statements

This press release contains certain statements which may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements regarding the expected filing of the Company’s Form 10-K and Form 10-Q and its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, and are not guarantees of future performance. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Momentus’ control. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to risks and uncertainties included under the heading “Risk Factors” in the Annual Report on Form 10-K filed by the Company on June 6, 2024, as amended by that certain Annual Report on Form 10-K/A filed by the Company on September 16, 2024, as such factors may be updated from time to time in our other filings with the Commission, accessible on the Commission’s website at www.sec.gov and the Investor Relations section of our website at investors.momentus.space. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241209629743/en/

For media inquiries:

press@momentus.space

For investor relations inquiries:

investors@momentus.space

Source: Momentus Inc.

FAQ

What is the ratio of Momentus (MNTS) reverse stock split announced in December 2024?

Momentus announced a 1-for-14 reverse stock split, meaning every 14 shares will be combined into one share.

How many shares will Momentus (MNTS) have outstanding after the reverse split?

After the reverse split, Momentus will have approximately 2 million shares outstanding, reduced from approximately 31 million shares.

When will Momentus (MNTS) begin trading on a split-adjusted basis?

Momentus will begin trading on a split-adjusted basis at the market opening on December 13, 2024.

Why did Momentus (MNTS) implement a reverse stock split?

The reverse split aims to comply with Nasdaq's minimum bid price requirement of $1.00 per share and attract a broader group of investors.