Nakamoto is planning a reverse stock split. The move is aimed at boosting the company's share price, which closed at 16 cents on Wednesday.
The stock has cratered more than 99% from last May, when it traded above $25. That kind of drop puts Nakamoto firmly in penny stock territory.
A 99% collapse in less than a year
Wednesday's close of 16 cents is a far cry from the $25-plus level the stock held in May last year. In roughly 12 months, the company lost nearly all of its market value. The reverse split is an attempt to push the share price higher by reducing the number of shares outstanding.
Why companies do reverse splits
A reverse stock split consolidates existing shares into fewer, more expensive ones. The total value of a shareholder's stake doesn't change — at least not on paper. But a higher per-share price can help a company meet minimum listing requirements on major exchanges and make the stock look less distressed to investors.
For Nakamoto, the math is simple: if the stock is at 16 cents, a 1-for-10 reverse split would push the price to roughly $1.60. Even after that, the stock would still be far below its former highs.
No guarantee of a turnaround
Reverse splits don't fix underlying business problems. They're a financial engineering tool, not a strategy. If the market sees no reason to buy the stock at the new price, shares can drift back down. Nakamoto's board is betting the split will buy time — or at least keep the stock from sinking any lower.
The company hasn't said when the reverse split will take effect or what ratio it will use. Shareholders will likely vote on the plan at a special meeting. Until then, the stock remains at 16 cents, and the clock is ticking.
