Superconductor completes reverse stock split for regaining compliance with the Nasdaq Stock Market’s listing maintenance standard.
After the completion of the reverse stock split today, Superconductor Technologies Inc. (STI) (SCON) has smacked the market with a blistering upsurge of 762% in pre-market at 5:17 A.M. EDT. The stock has completed the one-for-ten (1:10) reverse split of its common stock, as SCON trades at $3.
Superconductor recently declared that it was going to reverse split its common stock by one-for-ten (1:10), which has been implemented from today, September, 10. After the board of directors called for voting, the stockholders of the company approved the reverse split decision on September 9. The common stock of STI will keep on trading under the ticker SCON on a split-adjusted basis.
The basic objective of STI to implement this reverse stock split was to regain compliance with the Nasdaq Stock Market’s listing maintenance standard. Under Nasdaq’s listing standard, STI was to maintain at least $1 a share for the minimum bid price. After the completion of reverse stock split, the common stock shares of Superconductor outstanding have been reduced from 31,517,833 shares to 3,151,783 shares outstanding. The pre-split outstanding shares were of record as of August 7, 2020.
The company wanted the stock price to rise, as it was to obtain a minimum bid price of $1 for regaining Nasdaq’s compliance. STI closed yesterday’s market session, pre-split at $0.3478 soaring by 45% at day’s close. The stock price has spiked past the estimated price mark of $1 and currently, it trades at $3 in pre-market. The company stands with a market cap of approximately $10.926 million.
The price of STI stock will be examined once the trading session begins today. The company was not sure that whether the stock would be able to obtain compliance as other factors could have affected the shares price adversely, however, at the moment, STI is way ahead from being at risk and drop below $1.
With the following reverse stock split, every ten shares of outstanding common stock were converted to one share of common stock. While no fractional shares will be issued by the company with effect of the reverse stock split. In case, if the STI stockholders are entitled to fractional shares, they would obtain cash in lieu of fractional shares. Moreover, the reverse stock split will proportionally impact the stock options and warrants outstanding as of Sept. 10. In addition, the authorized common stock shares have also been reduced by a 1:10 ratio, which has resulted in 25,000,000 authorized capital stock shares.
The stockholders holding the shares certificates will be instructed by STI’s transfer agent who would explain the process for receiving new stock certificates. Whereas, those stockholders holding the shares in brokerage accounts would be free of taking any sort of action in order to exchange their shares.