Workhorse Group Announces 1-for-20 Reverse Stock Split
On June 13, 2024, Workhorse Group announced a 1-for-20 reverse stock split of its common stock, effective June 17, 2024. The move aims to increase the stock price to comply with Nasdaq's minimum bid price requirements. Shareholders approved the reverse split at the Annual Meeting on May 14, 2024. The stock will continue trading under the symbol WKHS. The reverse split consolidates every 20 shares into one, with no fractional shares issued, and aims to help the stock price reach at least $1.00 for ten consecutive trading days by September 16, 2024.
- The reverse stock split aims to meet Nasdaq's minimum bid price requirement.
- Approved by shareholders, showing investor support.
- Effective date set, ensuring quick implementation.
- Uniform impact on all shareholders.
- No fractional shares issued; rounded up to the nearest whole share.
- Maintains listing on Nasdaq, which is important for liquidity.
- There is no assurance that the reverse split will achieve the desired increase in stock price.
- Potential for negative perception among investors about the company's prospects.
- Share consolidation can lead to reduced share liquidity in the market.
- The reverse split does not improve the company’s underlying financial health.
- The company is under pressure to achieve a closing bid price of at least $1.00 per share by September 16, 2024.
Insights
Workhorse Group's announcement of a 1-for-20 reverse stock split is a significant event for shareholders. The primary goal of this move is to increase the share price and regain compliance with Nasdaq's minimum bid price requirement of
A reverse stock split is often viewed as a double-edged sword. On the one hand, it can help the company maintain its listing status and potentially attract institutional investors who are restricted from buying low-priced stocks. On the other hand, it may be perceived as a reaction to a declining share price, which may indicate underlying financial or operational challenges.
For retail investors, it's important to note that while the reverse split doesn't change the overall value of their holdings, the reduction in the number of shares could mean higher volatility due to lower liquidity. Additionally, the company must sustain a closing bid price of at least
In the long-term, the success of this move will depend on whether Workhorse can leverage their zero-emission commercial vehicle technology to drive revenue growth and improve profitability, which would support a higher share price organically.
This reverse stock split reflects Workhorse's strategy to maintain Nasdaq listing compliance while they focus on advancing their zero-emission vehicle technology. Ensuring the stock price remains above the
Reverse splits can sometimes signal that a company is struggling to maintain its stock price through market performance. However, if managed well and supported by improved business fundamentals, it can stabilize the company's stock and attract new investors.
Investors should closely monitor key developments in Workhorse's business strategy, market penetration and financial health post-split. The next few quarters will be telling in terms of whether this action achieves its intended effect or if underlying financial pressures continue to weigh on the stock.
CINCINNATI, June 13, 2024 (GLOBE NEWSWIRE) -- Workhorse Group Inc. (Nasdaq: WKHS) (“Workhorse” or “the Company”), an American technology company focused on pioneering the transition to zero-emission commercial vehicles, today announced that it will effect a 1-for-20 reverse stock split of its common stock, par value
At the Company’s 2024 Annual Meeting of Stockholders on May 14, 2024, the Company’s stockholders approved the proposal to authorize a reverse stock split of Workhorse’s common stock by a ratio of any whole number between 1-for-10 and 1-for-20, at any time prior to August 30, 2024, to be determined at the discretion of the Board of Directors.
The reverse stock split is intended to increase the market price of Workhorse’s common stock to regain compliance with the minimum bid price requirement for continued listing on Nasdaq, but there can be no assurance that the reverse split will have such effect. Workhorse has until September 16, 2024 to comply with this requirement and must see a closing bid price of its common stock of at least
As a result of the reverse stock split, every 20 shares of the Company’s common stock will automatically be combined into one share of common stock. The reverse stock split will affect all stockholders uniformly and will not alter any stockholder’s percentage ownership interest in the Company’s equity, except for immaterial adjustments that may result from the treatment of fractional shares as described below. No fractional shares will be issued in connection with the reverse stock split, and fractional shares resulting from the reverse split will be rounded up to the nearest whole share.
The reverse stock split will occur automatically on the effective date of June 17, 2024, without any additional action on the part of our stockholders. Empire Stock Transfer Inc. is acting as the exchange agent for the reverse stock split and will send stockholders a transaction statement indicating the number of shares of common stock that stockholders hold after the reverse stock split. Stockholders owning shares via a broker, bank, trust, or other nominee will have their positions automatically adjusted to reflect the reverse stock split, subject to such broker’s particular processes, and will not be required to take any action in connect with the reverse stock split.
About Workhorse Group Inc.
Workhorse is a technology company focused on providing electric vehicles to the last-mile delivery sector. As an American original equipment manufacturer, we design and build high performance, battery-electric trucks. Workhorse also develops cloud-based, real-time telematics performance monitoring systems that are fully integrated with our vehicles and enable fleet operators to optimize energy and route efficiency. All Workhorse vehicles are designed to make the movement of people and goods more efficient and less harmful to the environment. For additional information visit workhorse.com.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of federal securities laws with respect to the Company. Forward-looking statements are predictions, projections, and other statements about future events based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication, including but not limited to: our ability to cure any deficiencies in compliance with Nasdaq’s minimum bid price requirement or maintain compliance with other Nasdaq Listing Rules; the ability of the reverse split to allow us to regain compliance with Nasdaq’s minimum bid price requirement; our ability to obtain any additional relief necessary to regain compliance from Nasdaq or to meet applicable Nasdaq requirements for any such relief; and risks related to the substantial costs and diversion of personnel’s attention and resources due to these matters. While we are taking actions to address our non-compliance with Nasdaq’s minimum bid price requirement, there can be no assurance that we will regain compliance. Continued non-compliance or a delisting from Nasdaq would materially and adversely affect our ability to raise capital and our financial condition and business. 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.
Media Contact:
Aaron Palash / Greg Klassen
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
Investor Relations Contact:
Matt Glover and Tom Colton
Gateway Group
949-574-3860
WKHS@gateway-grp.com
FAQ
What is a 1-for-20 reverse stock split of WKHS?
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Why is Workhorse Group doing a reverse stock split?
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