CaliberCos Inc. approves reverse stock split

CaliberCos Inc. (NASDAQ:CWD), a real estate company currently trading at $0.25 per share with a market capitalization of $5.76 million, announced a significant change to its stock structure following a special meeting of shareholders held on Sunday. According to InvestingPro data, the stock has declined nearly 69% over the past year, making this restructuring particularly crucial. The company’s board of directors has approved a 1-for-20 reverse stock split of its common stock, which will take effect on May 2, 2025.

The reverse stock split was ratified by shareholders at the special meeting on April 21, 2025, and will result in every twenty shares of existing common stock being combined into one share. This action will reduce the number of outstanding shares of Class A common stock from approximately 18.6 million to around 928,715 shares, and Class B common stock from about 7.4 million to 370,821 shares. InvestingPro analysis indicates the stock is currently in oversold territory, with 14 additional real-time insights available to subscribers.

The reverse stock split aims to increase the market price per share of CaliberCos Inc.’s common stock, thereby meeting the Nasdaq Stock Market’s continued listing requirements. With analyst price targets ranging from $3.50 to $4.00 and an overall Financial Health Score rated as ’WEAK’ by InvestingPro, this move could be critical for the company’s market position. The company’s Class A common stock will continue trading on the Nasdaq Stock Market under the ticker symbol "CWD" on a split-adjusted basis starting from the effective date.

The adjustment will affect all shareholders uniformly and will not alter any shareholder’s percentage ownership or voting power. Additionally, the reverse split will proportionately adjust the conversion and exercise prices of the company’s outstanding convertible notes, warrants, and preferred stock, ensuring that the aggregate conversion or exercise price remains approximately the same post-split.

No fractional shares will be issued as a result of the reverse stock split. Instead, fractional shares resulting from the consolidation will be rounded up to the nearest whole share. ClearTrust LLC will act as the exchange agent for the reverse stock split process.

At the special meeting, shareholders also voted on other matters, including the approval of potential issuance of shares of Class A common stock pursuant to agreements with Mast Hill, L.P., and other related transactions. All proposals presented at the meeting were approved by the required majority.

This strategic move by CaliberCos Inc. is based on a press release statement and is part of the company’s efforts to comply with trading requirements and improve its stock’s marketability. Based on InvestingPro’s Fair Value analysis, the stock appears to be undervalued at current levels, though investors should note that the company is quickly burning through cash and faces significant challenges ahead.

In other recent news, CaliberCos Inc. has reported its financial results for the fourth quarter and full year of 2024, although specific figures were not disclosed in the initial filing. The company has also set terms for a public offering valued at approximately $900,000, with Craft Capital Management, LLC acting as the exclusive book-runner. Furthermore, Caliber has secured a $25 million equity line and issued a $1.67 million note in a strategic agreement with Mast Hill Fund, L.P., aimed at enhancing its capital structure. In another development, Caliber received unanimous approval from the Phoenix City Council for its Canyon Village project, which will convert a distressed office building into a 376-unit residential complex. This project is part of an opportunity zone with tax incentives and is expected to meet the growing housing demand in Phoenix. The company also updated its offering circular with the SEC to include new CUSIP information for its Series AA Cumulative Redeemable Preferred Stock. These financial and strategic moves reflect Caliber’s ongoing efforts to expand its real estate operations and strengthen its financial standing.

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