ShiftPixy announces reverse stock split

MIAMI - ShiftPixy, Inc. (NASDAQ:PIXY), a Florida-based staffing company specializing in the Gig Economy, has declared a reverse stock split of its common stock at a ratio of one-for-fifteen, set to take effect on the NASDAQ at the market open on October 14, 2024. This strategic move aims to consolidate the company's shares, potentially impacting the stock's marketability and shareholder value.

The company, with over 25 years of experience in workers' compensation and compliance programs, positions itself as a revolutionary platform provider in workforce management. ShiftPixy's platform is designed to help businesses manage shift-based employees while addressing regulatory mandates and administrative challenges.

The reverse stock split is a financial maneuver often employed by companies to boost the stock price by reducing the number of outstanding shares, without changing the company's market capitalization. For ShiftPixy, this action follows its ongoing efforts to adapt and grow within the Gig Economy, a sector characterized by short-term contracts and freelance work as opposed to permanent jobs.

Investors and shareholders of ShiftPixy should note that reverse stock splits do not alter the company's intrinsic value but may lead to adjustments in the stock price to reflect the reduced share count. The company's management believes the reverse split will enhance the attractiveness of the company's stock to a broader range of investors.

ShiftPixy cautions that any forward-looking statements included in their announcement, such as anticipated uses of proceeds and the expected closing date of the offering, are based on current management assumptions and are subject to risks and uncertainties that could cause actual results to differ materially.

The company has also highlighted its use of social media channels, including Facebook (NASDAQ:META), Twitter, LinkedIn, and YouTube, to communicate updates to investors and the public in compliance with Regulation FD, which aims to ensure all market participants receive material information simultaneously and transparently.

This news article is based on a press release statement from ShiftPixy.

In other recent news, ShiftPixy, a Miami-based employment agency service, has been actively navigating several significant developments. The company has approved an option for its CEO, Scott Absher, to acquire over 5 million shares of Preferred Class A Stock, contingent on a reverse stock split. This split, approved by shareholders, could range from one-for-two to one-for-twenty and is part of a strategy to increase the market price of shares.

ShiftPixy is also grappling with a potential Nasdaq delisting due to a market value shortfall. In response, the company plans to request a hearing before the Nasdaq Hearing Panel, temporarily halting the delisting process as it explores options to regain compliance.

Simultaneously, ShiftPixy announced a securities offering that could potentially raise about $2.5 million. This offering, facilitated by A.G.P./Alliance Global Partners (NYSE:GLP), includes over 2.4 million common shares and series A and B warrants priced at $1.04 each. Furthermore, ShiftPixy has negotiated with an existing investor to adjust the exercise price of previously issued warrants to align with the current offering. These are the recent developments that investors should be aware of.

InvestingPro Insights

As ShiftPixy, Inc. (NASDAQ:PIXY) announces its reverse stock split, investors are closely monitoring the company's financial health and stock performance. According to InvestingPro data, ShiftPixy currently holds a market capitalization of $8.85 million. The company's revenue for the last twelve months as of Q3 2024 stands at $15.02 million, though it has experienced a decline of 27.85% in revenue growth during the same period. This contraction highlights the challenges ShiftPixy faces in a dynamic Gig Economy.

InvestingPro Tips suggest that ShiftPixy is quickly burning through cash and is not expected to be profitable this year. Additionally, the stock has been subject to high price volatility, which may concern investors looking for stable returns. On a more positive note, ShiftPixy has seen a strong return over the last month, with a 13.59% increase in its price total return. This could indicate a short-term uptick in investor confidence following the announcement of the reverse stock split.

For investors seeking a deeper dive into the company's prospects, InvestingPro offers additional tips, including a total of 15 insights specific to ShiftPixy. These insights provide a comprehensive look at factors such as gross profit margins, debt levels, and stock price performance over various time frames. To explore these insights further, visit https://www.investing.com/pro/PIXY.

The company's recent financial maneuvers and the insights provided by InvestingPro highlight the importance of due diligence for investors considering ShiftPixy as part of their portfolio. As the Gig Economy continues to evolve, ShiftPixy's strategic decisions and their impact on the company's financial standing will be critical to watch.

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