The My Size Inc (NASDAQ: MYSZ) stock price soared 65.4% as investors reacted to news that the company board had approved a 1-for-25 reverse stock split to boost its share price. The stock split will become effective at the end of today’s trading session.
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The decision comes after the company’s shareholders approved the reverse stock split proposal during the annual general meeting (AGM) held yesterday. The stock split will significantly boost the MYSZ stock price, bringing it above $5.
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After the reverse stock split, MYSZ shares will now be aligned with the Nasdaq listing rules that require the shares of all listed companies to trade above $1. MYSZ shares had been trading below the $1 threshold since November 2021, putting the company at risk of being delisted from the exchange.
The development comes at the right time as My size Inc pursues an aggressive growth strategy, acquiring Spain’s Naiz fit in October. The acquisition was paid for with $500,000 in cash and 6 million MYSZ stock. The deal also includes a future payment of up to $1.55 million in cash after achieving certain milestones.
My size expects the combination of its MySizeID sizing solution and Naiz Fit to generate an extra $1 million in revenues in 2023. Still, the deal will accrue to the company’s top and bottom lines in Q4 2022.
The reverse stock split will make the My Size stock attractive to institutional investors. In addition, it will allow the company to raise funds at a higher valuation if needed. However, the company could have gone for a minor reverse stock split, given that shareholders approved a stock split from 1-for-10 to 1-for-30.
The more significant reverse stock split gives MYSZ stock a safe margin above the Nasdaq listing rule of $1. However, it also gives the stock a wide margin through which it could fall and erode shareholder value.
*This is not investment advice.
The My Size (MYSZ) stock price.
The MY Size (MYSZ) stock price soared 65.4% to trade at $0.2481, rising from Wednesday’s closing price of $0.1500.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.