SPACs Slap Some Lipstick on Their Penny-Stock Pigs
Reverse stock splits can help companies avoid delisting, but they’re not a panacea.
Don’t break the buck.
Photographer: Andrew Harrer/Bloomberg
Life comes at you fast in the stock market. At the start of the year, investors were so enamored of the technology sector that Alphabet Inc., Tesla Inc. and Amazon.com Inc. split their shares into smaller increments to attract even more retail buyers, often causing the stocks to rocket even further.
Now, with sentiment toward speculative tech companies near rock bottom, hundreds of startups that have seen their shares plummet this year are having to consider the opposite move: reverse stock splits to consolidate a large number of shares into smaller amounts, boosting the share price to a less embarrassing level.