Troika Media (NASDAQ:TRKA) stock is a hot topic among traders on Thursday as the company’s shares undergo a reverse stock split.
This reverse stock split has Troika Media consolidating every 25 shares of TRKA stock into a single share. While this changes the number of outstanding shares, it doesn’t change investors’ stakes in the company or Troika’s market capitalization.
Troika Media notes that the one-for-25 reverse stock split was approved by the company’s Board of Directors. It also mentions that the split didn’t require shareholder approval due to Nevada laws on the matter.
What’s Behind the TRKA Reverse Stock Split?
Troika Media is enacting this reverse stock split to increase the price of its shares. It’s doing this to comply with the $1 minimum bid price required to remain on the Nasdaq. It needed to consolidate shares as its prior closing price was only about 12 cents per share.
Sid Toama, CEO of Troika Media, said the following in a news release:
“The Company has addressed many legacy equity, compliance and regulatory matters over the past year. We believe that this reverse stock split should be viewed not just as a critical step to regain compliance with NASDAQ’s listing requirement, but also as a part of our strategic plan for the long term.”
TRKA stock is down 10.3% as of Thursday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
