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In a move to comply with Nasdaq’s minimum bid price requirement, Treasure Global Inc (NASDAQ:TGL) has announced a reverse stock split of its common stock at a ratio of 1-for-50. With a current market capitalization of just $3.62 million and shares trading at $0.06, the company has seen its stock price decline by nearly 99% over the past year. According to InvestingPro analysis, the stock appears undervalued at current levels. The New York-based business services company received stockholder approval for the reverse stock split on October 23, 2024, and the Board of Directors determined the exact split ratio.
The reverse stock split will take effect when the market opens on Monday, with the company’s common stock continuing to trade on The Nasdaq Capital Market under the ticker symbol "TGL". The split-adjusted trading will bear a new CUSIP number, 89458T304. Despite recent market challenges, InvestingPro data shows the company maintains a healthy current ratio of 3.08, indicating strong short-term liquidity. Subscribers can access 14 additional ProTips and detailed financial metrics to better understand the company’s position.
This strategic step is primarily aimed at satisfying the $1.00 minimum bid price rule, a listing requirement for maintaining its presence on the Nasdaq exchange. However, the company has stated that there is no assurance that it will meet this minimum bid price requirement post-split.
The reverse stock split will convert every fifty shares of issued and outstanding common stock into one new share. Consequently, the total number of outstanding shares will decrease from 81,426,799 to approximately 1,628,536 shares. Adjustments will also be made to the shares underlying outstanding equity awards, warrants, convertible notes, and the number of shares issued and issuable under the company’s stock incentive plans.
Stockholders will not receive fractional shares as a result of the reverse split. Instead, any fractional shares will be rounded up to the nearest whole number, ensuring all stockholders are treated equally without altering their percentage ownership in the company. Trading at just 0.18 times book value, the stock presents an interesting value proposition for investors willing to weather the current volatility. Get comprehensive valuation metrics and expert analysis with InvestingPro.
Vstock Transfer, LLC, the company’s transfer agent, will manage the reverse stock split process. Stockholders with pre-split shares in electronic book-entry form do not need to take any action to receive post-split shares. Those holding shares through a broker or other nominee will see their positions automatically adjusted.
The information provided in this article is based on the latest SEC filing by Treasure Global Inc.
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