MarketWise announces reverse stock split to meet Nasdaq rules

BALTIMORE - MarketWise, Inc. (NASDAQ: MKTW), a prominent digital subscription services platform for financial research and tools, has announced a 1-for-20 reverse stock split of its common stock, scheduled to take effect after market close on April 2, 2025. The announcement comes as the company’s stock, currently trading at $0.49, has experienced a significant 68% decline over the past year, despite maintaining strong fundamentals with a P/E ratio of 2.69 and an impressive gross profit margin of 87.5%. According to InvestingPro analysis, the stock appears undervalued at current levels. The adjustment aims to align the company’s share price with its market capitalization and ensure compliance with Nasdaq’s minimum bid price requirement.

The reverse split, approved by shareholders on March 20, 2025, will see the company’s Class A common stock begin trading on a split-adjusted basis from the opening of markets on April 3, 2025, under the unchanged ticker symbol "MKTW." The new CUSIP number for the Class A common stock will be 57064P206.

Dr. David "Doc" Eifrig, Interim Chief Executive Officer of MarketWise, expressed satisfaction with the shareholder approval, stating that the move would make the stock price more appealing to institutional investors and help maintain the company’s listing on the Nasdaq Global Market. He also believes that the higher share price will enhance market perception of MarketWise, complementing its growth and improving margins. The company currently offers a substantial 14% dividend yield and has demonstrated strong shareholder focus through aggressive share buybacks, as highlighted in InvestingPro’s analysis, which includes over 10 additional key insights about the company’s performance.

Once the reverse stock split is effective, the number of outstanding shares of MarketWise’s Class A common stock will be reduced from approximately 49.5 million shares to about 2.5 million shares, and Class B common stock will decrease from roughly 276.6 million shares to approximately 13.8 million shares. This consolidation will be accompanied by proportional adjustments to outstanding equity awards and the number of shares reserved for the company’s equity incentive and employee stock purchase plans. Additionally, the authorized shares of Class A and Class B common stock will be proportionally reduced, while preferred stock authorization remains unchanged.

Fractional shares resulting from the reverse stock split will be settled in cash based on the closing price of the company’s common stock on April 2, 2025, adjusted post-split.

The reverse stock split is intended to elevate the company’s stock bid price to meet the Nasdaq Global Market’s minimum requirement of $1.00 per share, as well as to broaden its appeal to a more diverse investor base.

MarketWise, a fully digital company, is known for providing high-quality financial research, software, and educational tools to its subscriber base, spanning millions of users across various platforms. With annual revenue of $408.7 million and analysts projecting profitability this year, the company maintains a strong market position. For detailed analysis and comprehensive insights about MarketWise’s financial health and future prospects, investors can access the full Pro Research Report available on InvestingPro, part of their coverage of over 1,400 US stocks.

This news is based on a press release statement from MarketWise, Inc.

In other recent news, MarketWise, Inc. announced significant changes to its capital structure following a Special Meeting of Stockholders. The company received strong support for a Reverse Split Proposal, with stockholders approving a 1-for-20 reverse stock split of its Common Stock. The Board of Directors will determine the timing of this reverse stock split and has the authority to abandon the plan if necessary. Additionally, MarketWise stockholders approved the Authorized Shares Proposal, which will reduce the number of authorized shares from 1,350,000,000 to 162,500,000. This includes a reduction in Class A Common Stock from 950,000,000 to 47,500,000 and Class B Common Stock from 300,000,000 to 15,000,000. Both proposals received overwhelming support, indicating strong shareholder backing for these strategic changes. The Adjournment Proposal, which would allow the meeting to be adjourned if needed, was also approved but became unnecessary as the main proposals passed. These developments are part of MarketWise’s ongoing efforts to adapt its business strategy and capital structure in a dynamic market environment. Investors and analysts are closely monitoring these changes to assess their impact on the company’s future performance.

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