Meta Materials (NASDAQ: MMAT) stock jumped more than 9% on Friday after the company announced a 1-for-100 reverse split to regain NASDAQ compliance. The reverse split was approved at its recent annual stockholders’ meeting and is scheduled to take effect on January 29 at market open.
In the reverse split, every 100 shares of MMAT stock will be consolidated into one share, leading to a corresponding 100-fold increase in the price of MMAT stock. This consolidation will not alter the overall ownership of the company.
Meta explained,
“No fractional shares will be issued in connection with the Reverse Stock Split.”
The company added,
“Any fractional shares of common stock resulting from the Reverse Stock Split will be rounded up to the nearest whole post-split share and no stockholders will receive cash in lieu of fractional shares.”
Following the reverse split, the total outstanding shares will plummet from 564 million to 5.64 million. At the same time, the authorized shares of common stock will dwindle from 1 billion to 10 million.
Meta Initiates Reverse Split for Nasdaq Compliance
Meta will implement a reverse split to comply with Nasdaq’s minimum $1 requirement, prompted by Nasdaq’s notification of non-compliance on March 20, 2023. They were initially granted 180 days, until September 18, to meet the compliance threshold.
However, MMAT failed to meet the compliance requirement by September 18, where compliance is defined as maintaining a closing price of $1 or more for a minimum of 10 consecutive trading days. Nasdaq then extended another 180-day grace period until March 18, 2024.
The non-compliance concerns persisted as Nasdaq decided to delist MMAT stock on November 27 due to shares closing at 10 cents or less for ten consecutive trading days. Following this, Meta submitted a hearing request to the Nasdaq Hearings Panel, which was approved, with the hearing set for March 21, 2024. Meanwhile, MMAT stock will remain tradable on the Nasdaq until the hearing concludes.
Meta warned,
“There is no assurance that a favorable decision will be obtained from the Panel at the hearing.”
Meta Materials (NASDAQ: MMAT) Stock Price Action
MMAT stock surged 9.19% on Friday. The traders had exchanged hands with 28,953,598 (28.95 million) shares compared to the average daily trading volume of 15.88 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
