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PITTSBURGH – Smith Micro Software , Inc. (NASDAQ:), a software developer, announced a 1-for-8 reverse split of its common stock, aiming to increase its per-share trading price and comply with Nasdaq’s minimum bid price requirement for continued listing.
The reverse split, approved by stockholders at a special meeting held on April 3, 2024, will take effect at the close of business on April 10, 2024. Trading on a split-adjusted basis will commence on April 11, 2024, under the same ticker symbol SMSI.
The reverse split will convert eight current shares of common stock into one share of fully paid and nonassessable common stock. No fractional shares will be issued; stockholders will receive a rounding up to the nearest whole share instead.
The total outstanding common stock will be reduced from approximately 76.8 million shares to about 9.6 million shares, based on the number of shares outstanding as of April 2, 2024. Still, the total authorized number of shares will remain unchanged.
Outstanding warrants and equity awards will be proportionally adjusted to maintain their economic value. This includes the per share exercise price of options and the number of shares issuable under such options. The total number of shares available for future grants under the company’s equity plans will also be proportionally decreased.
Stockholders holding shares in electronic form need not take any action as their shares will be automatically adjusted to reflect the reverse split. Those holding shares through a bank, broker, or other nominee will also have their positions automatically adjusted.
Stockholders with physical stock certificates will receive instructions from the company’s transfer agent, Computershare, on exchanging their certificates for new ones or for shares held electronically in book-entry form, representing the post-reverse split number of shares.
Smith Micro Software specializes in developing software that enhances the mobile experience, including solutions for wireless service providers worldwide. Its portfolio includes products for digital family lifestyle, voice messaging capabilities, and monetizing rich content.
The company has cautioned that certain statements in the press release are forward-looking and involve risks and uncertainties. These include assumptions about the effects of the reverse split and its continued listing on Nasdaq, which may not prove accurate. The information in this article is based on a press release statement.
InvestingPro Insights
As Smith Micro Software, Inc. (NASDAQ:SMSI) undergoes a reverse stock split to maintain its Nasdaq listing, it’s crucial for investors to consider the company’s financial health and market performance.
According to real-time data from InvestingPro, SMSI has a market capitalization of 26.14 million USD, indicating a relatively small size within the software industry. The company’s Price / Book ratio, as of the last twelve months ending Q4 2023, stands at a low 0.35, suggesting that the stock may be undervalued compared to the book value of its assets.
Despite the company’s efforts to meet Nasdaq’s requirements, InvestingPro Tips highlight several challenges. Smith Micro Software is not profitable over the last twelve months, with a negative P/E ratio of -0.90, and analysts do not anticipate the company will be profitable this year.
Moreover, the company has been quickly burning through cash, and analysts expect a sales decline in the current year. These factors contribute to the stock’s high price volatility and significant price decline over the past year, with a 70.72% drop in the 1-year price total return as of the current date.
Investors looking to delve deeper into Smith Micro Software’s financials and market performance can find a wealth of additional tips on InvestingPro. In fact, there are 12 more InvestingPro Tips available for SMSI, which can help investors make more informed decisions. For those interested in a comprehensive analysis, we invite you to explore these tips and utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
With the next earnings date approaching on May 8, 2024, investors will be keen to see if the reverse stock split and the company’s strategic initiatives will pave the way for improved financial performance and stability in the stock’s trading price.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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