The analysis demonstrates S of ChargePoint (CHPT -17. 87%), the electric car charging company, tumbled 14. 3% through 10:50 a (something worth watching).
ET Monday morning after conducting a 1-for-20 reverse stock split. Image source: Getty Images. Additionally, However, What is a reverse split.
Market analysis shows name suggests, a reverse stock split is the opposite of a stock split.
At the same time, Instead of taking one of stock and slicing it into several smaller s, each costing less and representing a smaller ownership stake in the company, a reverse split merges several existing s into one larger, higher-priced.
From a holder's perspective, after a reverse split happens, you own fewer s than you started with, but they have a higher price (something worth watching).
Your actual ownership stake in the company, however, doesn't change after a reverse stock split (or for that matter, after an ordinary stock split, either). Why reverse split.
So what's the point of a reverse split, given the current landscape.
ChargePoint explains: "The reverse stock split is int to increase the market price per of the Company's common stock and help the Company comply with the minimum trading price criteria for continued listing on the New York Stock Exchange.
In contrast, " Simply put, ChargePoint s were selling below the $1-per- requirement for remaining listed.
To fix that, the company squished 20 s together to create one big super- costing more than $1 (in fact, more than $10 right now).
On the other hand, As a result, it's no longer in danger of immediate delisting. Is ChargePoint stock a buy (noteworthy indeed). No, ChargePoint stock is not a buy, in today's financial world.
The fact that ChargePoint wasn't able to boost its stock price by, say, growing its sales or reporting a fit, and saw no alternative but to reverse-split its way out of its listing dilemma, tells me this company is not performing at all well.
It's almost certainly a sell.