Those following the stock price of 23andMe (NASDAQ: ME) will have noticed a significant shift in price, to the tune of 20x. This has not come with an expansion of market cap, but is the result of a restructure.
In a significant corporate move, 23andMe Holding Co, a prominent name in the genetics-led healthcare and therapeutics field, made strides to address its stock performance issues by implementing a 1-for-20 reverse stock split in order to remain in compliance with NASDAQ regulations.
This financial manoeuvre for its Class A and Class B common stock is deemed a strategic attempt to revitalise the company's market standing and comes as the stock had been trading under $1 for an extended period.
The reverse stock split became effective today, and has culminated in the consolidation of every 20 shares into a single share of the respective class. Prior to the split, 23andMe boasted approximately 350,292,546 shares of Class A common stock and 166,443,192 shares of Class B common stock. These figures have now been recalibrated to around 17,514,628 and 8,322,160 shares respectively, post-split.
This change comes at a challenging financial moment for 23andMe, with their Q1 2025 revenue seeing a sharp 34% decline to $40 million. This reduction stems largely from the termination of a once-lucrative partnership with GSK. However, on a more positive note, the net loss has shown an upward trend, currently posted at $69 million.
Despite the fiscal pressures, 23andMe is not remaining static. The company has been proactively diversifying its service offerings, launching new genetic predisposition reports and introducing a weight loss program through its subsidiary, Lemonaid Health.
✓ Small-Cap Stocks With Huge Potential
If you're looking to add some small-cap stocks to your portfolio, then you need to see this.
Before you decide where to invest, you will want our special report on 5 Small-Cap Stocks To Consider. Our team of experts have picked our 5 small-cap stocks they think have the biggest potential for growth in 2024 and beyond.
What's more, we're giving away this valuable research FOR FREE!
The company's financial health is not all dire; it is fortified by more cash than debt, granting it a cushion of financial agility amid these trying times. While the reverse stock split is primarily a tactic to bolster the stock's faltering performance and to align with Nasdaq's minimum bid price prerequisites, it may also spark interest among new investors who could be vital for the company's turnaround.
Amidst the storm of financial uncertainties, 23andMe's reverse stock split stands as both a remedial and a progressive step with the hope of stabilising its position in the market while aiming to attract fresh investments to forge a path toward profitability.
Searching for the Perfect Broker?
Discover our top-recommended brokers for trading or investing in financial markets. Dive in and test their capabilities with complimentary demo accounts today!
- eToro Wide range of instruments available to trade – Read our Review
- Admiral Markets More than 4500 stocks & over 200 ETFs available to invest in – Read our Review
- BlackBull 26,000+ Shares, Options, ETFs, Bonds, and other underlying assets – Read our Review
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY