Wave Systems Approves Reverse Stock Split

By Chris Lange Updated Jan 13, 3:34PM EST · Published Dec 30, 1:40PM EST

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Wave Systems Approves Reverse Stock Split — © Thinkstock

Wave Systems Corp. (NASDAQ: WAVX) was declining in Wednesday’s session following the announcement of a reverse stock split. The company announced at the special shareholders’ meeting that the board of directors has approved a one-for-10 reverse split of the common stock. The reverse stock split will be in effect at the commencement of trading on Thursday, December 31, 2015.

Ultimately, the reverse split is being implemented for purposes of regaining compliance with the $1.00 per share minimum closing bid price requirement for continued listing on the Nasdaq Capital Market.

For every 10 shares held, Wave shareholders will receive in exchange one new share of Wave Systems common stock. Shareholders otherwise entitled to fractional shares as a result of the reverse stock split will receive cash payments in lieu of those fractional shares.

The number of common shares issued and outstanding (Class A and Class B combined) will be reduced to approximately 6.1 million (from approximately 60.8 million). Shareholders’ percentage ownership in the company will remain unchanged as a result of the reverse split.
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According to the release:

The Board of Directors believes that the reverse stock split will enable the Company to regain compliance with the $1 per share minimum closing bid price continued listing requirement. However, there can be no assurance that this result will be achieved or that Wave will maintain the listing of its common stock on the Nasdaq Capital Market.

In addition to the bid price rule, in order to remain listed on the NASDAQ Capital Market, we must also maintain compliance with all of the other required continued listing requirements of the NASDAQ Capital Market, including the $35 million market capitalization requirement. We are not currently in compliance with this rule. In accordance with the NASDAQ Listing Rules, the Company has been provided a grace period of 180 calendar days, through February 8, 2016, to evidence compliance with the minimum market value rule.

Shares of Wave Systems were last seen trading down nearly 8% at $0.17, with a consensus analyst price target of $1.76 and a 52-week trading range of $0.06 to $0.93.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.