Movie subscription service MoviePass’s parent company Helios and Matheson wants to offer its shareholders a reverse stock split, for a second time this year.
In a reverse stock split, the issuing company reduces the number of outstanding shares without altering their total value (which means, price per share is raised by the firm). Executives at Helios and Matheson are seeking shareholder votes on a plan that would allow shareholders to trade in 500 shares for a single share worth 500-times as much.
If approved, the reverse stock split could increase Helios and Matheson stock price from less than 2 cents to as much as $10 — which would possibly be sufficient to allow the company to continue being listed on the Nasdaq stock exchange.
In July, the company executed a reverse stock split to boost its stock from 8 cents to $21; however, its market price dropped to less than a dollar within days.
Nasdaq has warned Helios and Matheson that it could be removed from the exchange if its stock price continues to remain low.