According to Axcella Health, shares of AXLA stock are going to undergo a one-for-25 reverse split. This split will go into effect after markets close on Sept. 18, which will see the starts start trading on a split-adjusted basis on Sept. 19.
Investors will note that Axcella Health is moving forward with the reverse stock split to increase the trading price of its shares. This comes as it seeks to regain compliance with Nasdaq Global Market listing standards.
Nasdaq rules require stocks to maintain a minimum bid price of $1 per share. To put that in perspective, shares of AXLA stock closed out Thursday at a price of $1.01 cents. Falling below that minimum bid price for too long would see the shares delisted from the exchange.
The reverse stock split will see Axcella Health consolidate 25 shares of AXLA into a single share. This will increase the share price of the stock without changing the company’s market capitalization. It also won’t alter the stakes that investors have in the company.
AXLA stock is down 24.2% as of Friday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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