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Grasping for Nasdaq straws, BIO-key pulls a big reverse stock split

Grasping for Nasdaq straws, BIO-key pulls a big reverse stock split
 

BIO-key‘s board has chosen to perform a reverse stock split, which will increase the firm’s share price enough to meet Nasdaq minimum requirements.

The board members have decided on a 1-for-18 reverse that will reduce the number of BIO-key common shares from 17 million issued and outstanding to about 931,000.

In August, they issued 21 million shares to raise $3.75 million, an action that helped lower share prices.

The biometric authentication software and hardware provider is one of the firms in its competitive set unable to create market momentum. That means lower revenue, despite some recent contract wins, which can mean lower share prices.

BIO-key’s shares have fallen below the Nasdaq’s $1 floor. If a company can’t consistently maintain a share price of $1, it can be dropped from the prestigious tech marketplace. The company is fighting for growth in multiple ways, but results will come in the medium term.

There’s intangible good in remaining on the Nasdaq, but after the split, shares prices will multiply (without new tangible underlying value), dissuading new purchases and suppressing needed investment.

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