U Power Limited (NASDAQ: UCAR) stock soared over 14% in intraday trading Monday, driven by anticipation of its upcoming reverse stock split later this week.
U Power (UCAR) has announced plans to implement a reverse stock split, consolidating 100 shares of UCAR into a single share of stock, effective when markets open on Wednesday. Despite the consolidation, the stock will retain the UCAR ticker symbol but will be assigned a new CUSIP number: G9520U116.
The shareholders of U Power approved the decision for this reverse stock split in a special meeting held in late March. The company has guaranteed a seamless transition for its shareholders by declaring that the reverse split will not result in the issuance of any fractional shares.
The initiation of the reverse stock split by U Power follows a delisting notice the company received in February. The main problem was the company’s stock price, a nominal 5 cents, which endangered its listing status. The delisting notice prompted U Power to appeal and adopt a reverse stock split strategy to elevate its share price.
By implementing the reverse stock split, U Power aims to increase its stock price to around $5 per share based on its prior closing price. The company expects this consolidation will bring the stock price in line with the Nasdaq Exchange’s minimum requirement of $1 per share, thereby mitigating the risk of delisting.
U Power (NASDAQ: UCAR) Stock Price Action
UCAR stock surged 14.18% to close at $0.06 on Monday. The traders had exchanged hands with 41,432,454 (41.43 million) shares compared to the average daily trading volume of 29.84 million.
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