Land-based salmon producer AquaBounty has witnessed a startling decline in its share price.
The share price of US land-based salmon producer AquaBounty plunged nearly 10 percent on Friday.
At the end of trading on Friday, AquaBounty’s stock price was down to $2.36 from its split-adjusted peak of $4.29 on October 16, just 11 days after shareholders approved a reverse stock split.
The decline followed a move by Oppenheimer s stock from Outperform to Perform on October 20, further exacerbating its financial woes.
The company initiated the reverse stock split earlier this month to raise its share price above the $1.00 threshold. Falling below this threshold could lead to delisting, impacting the company’s ability to raise capital.
In September, AquaBounty urged shareholders to approve the stock split as a crucial measure to secure its financial future. Shareholders granted their consent on October 12, endorsing the 1-for-20 reverse stock split, which consolidates existing shares without altering the company’s value.
AquaBounty’s board also reduced the number of authorized shares of common stock as part of the stock split. Delisting could substantially hamper AquaBounty’s ability to raise capital or pursue restructuring efforts. While the company’s operations largely depend on attracting more capital, there’s no guarantee of acquiring the necessary funds.
In June, rising costs prompted AquaBounty to pause its salmon farm construction in Pioneer, Ohio. To lessen delisting threats, the firm has suggested reducing its authorised shares from 150 million to 75 million.
A reverse stock split would consolidate shareholders’ existing stock into fewer shares, affecting the stock’s price, not the firm’s actual value. After not meeting the Nasdaq’s $1.00 minimum bid price for 30 straight business days, AquaBounty was given two 180-day extensions to comply.