Rent the Runway (NASDAQ:RENT) stock is on the move Wednesday as the shared designer closet company prepares for a reverse split of its shares.
Rent the Runway will undergo a one-for-20 reverse stock split after markets clsoe on April 2. This will see it consolidate 20 shares of RENT stock into a single share. Shareholders approved the reverse split in a meeting last week.
Rent the Runway notes that this reverse split won’t affect the stakes of current shareholders in the company. Both the company’s Class A and Class B shares will be affected by it as well.
What’s Behind the RENT Reverse Stock Split?
Rent the Runway is enacting this reverse stock split to increase the price of its shares. The company is doing this to get it back above the $1 minimum required to maintain a listing on the Nasdaq Capital Market.
If Rent the Runway doesn’t go forward with the reverse stock split, it puts the company’s shares in danger of being delisted. They’ve been trading under the minimum bid price since Sept. 4, 2023.
RENT stock is down 3.5% as of Wednesday morning.
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On the date of publication, William White did not have (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.
