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Stem, Inc., a company specialized in miscellaneous electrical machinery, equipment, and supplies, has announced a reverse stock split and a reduction in the total number of authorized shares. The company, currently trading at $0.47 with a market capitalization of approximately $77 million, has seen its stock decline by 59% over the past year. According to InvestingPro analysis, the company faces significant financial challenges, with 14 key risk factors identified in their comprehensive Pro Research Report. The reverse stock split, at a ratio of 1-for-20, will be effective at 12:01 a.m. Eastern Time on June 23, 2025. Concurrently, the authorized shares of common stock will be reduced from 500 million to 250 million shares. This strategic move comes as the company grapples with a substantial debt burden of $593.58 million and rapidly diminishing cash reserves, as highlighted in recent InvestingPro financial health assessments.
The Board of Directors of Stem, Inc. approved these changes following the company’s 2025 Annual Meeting of Stockholders. To implement the reverse stock split and the authorized shares reduction, the company filed an amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware on June 11, 2025. With a weak financial health score of 1.31 and negative EBITDA of -$82.67 million in the last twelve months, these corporate actions reflect the company’s efforts to address its challenging financial position.
At the effective time, every 20 shares of the company’s common stock will be combined into one new share of common stock. No fractional shares will be issued; instead, stockholders will receive a cash payment for any fractional share they would have received, based on the closing price of the common stock on the New York Stock Exchange on June 20, 2025, adjusted for the reverse stock split ratio.
The common stock is expected to begin trading on a split-adjusted basis when the market opens on June 23, 2025, under a new CUSIP number (85859N300). The par value per share of the common stock will remain unchanged.
Adjustments will also be made to the number of shares available for issuance under the company’s equity incentive plans, the number of shares issuable and the exercise prices under outstanding equity awards and warrants, the conversion rates of outstanding convertible notes, and the strike prices of existing capped call options. These adjustments will be proportionate to the 1-for-20 split ratio.
This information is based on a press release statement filed with the Securities and Exchange Commission.
In other recent news, Stem Inc (NYSE:STEM). reported its first-quarter 2025 earnings, surpassing revenue expectations with $32.5 million compared to the forecasted $31.27 million. The company also posted an earnings per share (EPS) of -$0.15, which exceeded the anticipated -$0.19. Stem Inc. achieved a 27% year-over-year increase in total revenue and reported its first positive operating cash flow of $9 million. Additionally, the company announced a 27% reduction in workforce, aiming for $30 million in annual cost savings.
Stem Inc. also conducted its 2025 Annual Meeting of Stockholders, where shareholders approved several key proposals, including an amendment to the 2024 Equity Incentive Plan. The company ratified Deloitte & Touche LLP as the independent auditor for the fiscal year ending December 31, 2025. Furthermore, Stem Inc. announced a 1-for-20 reverse stock split to regain compliance with the New York Stock Exchange’s minimum average closing price requirement. This reverse split will reduce the company’s outstanding common shares from approximately 167 million to 8.4 million.
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