Nuwellis Announces Reverse Stock Split
Nuwellis announced a 1-for-35 reverse stock split of its common stock, effective June 27, 2024. Post-split, trading will commence on June 28, 2024, under the symbol NUWE on The Nasdaq Capital Market. Approved by shareholders on June 6, 2024, the reverse split will consolidate every thirty-five shares into one, while maintaining the total authorized shares at 100 million. Any fractional shares resulting from this will be rounded down, with shareholders receiving cash equivalent for the market value of the fractional share. The new CUSIP number for the common stock post-split is 67113Y603. More details are available in the proxy statement filed with the SEC on May 17, 2024, and on the company's Investor Relations page.
- Approved 1-for-35 reverse stock split to potentially enhance share value.
- Shareholders to receive cash for fractional shares, ensuring fair compensation.
- Reverse stock split reduces the number of outstanding shares, which may signal financial instability.
- Shareholders' equity diluted due to the consolidation of shares.
Insights
A reverse stock split is a corporate action that consolidates the number of existing shares into fewer, proportionally more valuable shares. In this case, Nuwellis has opted for a 1-for-35 reverse stock split. This means that for every 35 shares previously held, investors will now own one share. Though the market capitalization of the company remains the same, the per-share price increases.
The primary reason companies undertake reverse stock splits is to boost the share price. This is often done to meet minimum listing requirements for stock exchanges like Nasdaq, which requires a minimum closing bid price. Nuwellis's decision may suggest they are attempting to ensure continued compliance with these listing requirements, which is vital for maintaining liquidity and investor confidence.
Investors should be aware that while a reverse split can signal future positive developments, it is commonly viewed with skepticism. Companies undergoing reverse splits often face financial challenges and this move can be seen as a last-ditch effort to prop up the stock price.
For retail investors, the immediate effect is a decrease in the number of shares held and an increase in the stock price. It's important to note that the intrinsic value of their holdings remains unchanged by this action alone. However, the long-term value will depend on whether Nuwellis can leverage this maneuver to strengthen its financial health and operational performance.
In the context of market perception, a reverse stock split can have mixed implications. On one hand, it can enhance the stock's appeal to institutional investors who might shy away from 'penny stocks.' By consolidating the stock, Nuwellis attempts to project an image of greater stability and attractiveness, which might draw in more sophisticated investors.
However, historically, reverse splits are often followed by continued declines in share price if the underlying issues that led to the low share price are not addressed. Investors might be wary about whether this move is a superficial fix to deeper, unresolved problems within the company. The company needs to demonstrate operational and financial improvements to fully capitalize on the psychological boost of the reverse split.
Additionally, the unchanged number of authorized shares (100 million) might indicate potential for future dilution, should the company decide to issue more shares. This could be a concern for current shareholders, as it could dilute their holdings and suppress future share price gains unless accompanied by significant growth or strategic acquisitions.
MINNEAPOLIS, June 26, 2024 (GLOBE NEWSWIRE) -- Nuwellis, Inc. (Nasdaq: NUWE) (“Nuwellis” or the “Company”), a medical technology company focused on transforming the lives of people with fluid overload, announced today a 1-for-35 reverse split (the “Reverse Stock Split”) of its common stock, par value
At the Company’s annual meeting of stockholders on June 6, 2024, its stockholders approved a proposal to amend the Company’s Fourth Amended and Restated Certificate of Incorporation to effect such a reverse split of the Company’s outstanding Common Stock at a ratio in the range of 1-for-5 to 1-for-70 to be determined at the discretion of our Board of Directors.
As a result of the Reverse Stock Split, every thirty-five shares of authorized Common Stock will be automatically combined into one share of Common Stock. The number of authorized shares of the Company’s Common Stock will remain at 100 million, while the number of outstanding shares will be reduced in accordance with the Reverse Stock Split. Any fraction of a share of Common Stock that would be created as a result of the Reverse Stock Split will be rounded down to the next whole share and the stockholder will receive cash equal to the market value of the fractional share, determined by multiplying such fraction by the closing sales price of the Company’s Common Stock as reported on Nasdaq on the last trading day before the Reverse Stock Split becomes effective (on a split-adjusted basis).
The Company’s Common Stock will continue to trade on The Nasdaq Capital Market under the symbol “NUWE”. The new CUSIP number for the Common Stock following the reverse split is 67113Y603.
Additional information about the Reverse Stock Split can be found in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on May 17, 2024, a copy of which is also available on the Company’s website under the Investor Relations page.
About Nuwellis
Nuwellis, Inc. (Nasdaq: NUWE) is a medical technology company dedicated to transforming the lives of patients suffering from fluid overload through science, collaboration, and innovation. The company is focused on commercializing the Aquadex SmartFlow® system for ultrafiltration therapy. Nuwellis is headquartered in Minneapolis, with a wholly owned subsidiary in Ireland. For more information visit www.nuwellis.com or visit us on LinkedIn or Twitter
Investor:
Vivian Cervantes
Gilmartin Group
ir@nuwellis.com
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