SAN JOSE, Calif. - Quantum (NASDAQ:QMCO) Corporation (NASDAQ:QMCO), known for its AI and unstructured data solutions, has announced a 1-for-20 reverse stock split. This move is aimed at boosting the per-share trading price of the company's common stock, ensuring compliance with Nasdaq's listing requirements. The adjustment will not change stockholders' percentage ownership, except for the rounding up of fractional shares.
The reverse stock split will consolidate every 20 issued shares of common stock into one share, effectively reducing the total number of outstanding shares from about 95.8 million to approximately 4.8 million. Equity awards, warrants, and shares issuable under Quantum's equity incentive plans will also be proportionately adjusted.
Shareholders approved the reverse stock split during the 2024 annual meeting, and it will take effect after the market closes today. Trading on a split-adjusted basis will commence tomorrow on Nasdaq, under the ticker QMCO with a new CUSIP number 747906600. Computershare Trust Company, N.A. will act as the exchange agent for the reverse stock split.
Stockholders with shares in book-entry form or held through a broker, bank, trust, or other nominee will automatically have their holdings adjusted to reflect the reverse stock split. Those holding certificated shares will receive instructions from Computershare on obtaining their post-split shares.
Quantum's initiative to execute a reverse stock split follows its aim to maintain compliance with Nasdaq's continued listing standards, which include maintaining a minimum bid price. The company has filed a Current Report on Form 8-K with the SEC on August 20, 2024, providing additional details about the reverse stock split.
This strategic decision reflects Quantum's ongoing efforts to align its stock performance with its operational and technological expertise in the data management sector. The information regarding the reverse stock split is based on a press release statement from Quantum Corporation.
In other recent news, Quantum Corporation, a computer storage device manufacturer, has announced a reverse stock split. The split, approved by shareholders at the annual meeting, will take effect on a 1-for-20 ratio. The same meeting saw the election of seven directors and the approval of an amendment to increase the number of shares reserved under the 2023 Long-Term Incentive Plan by 5,000,000 shares.
In recent financial developments, Quantum reported a first quarter fiscal year 2025 revenue of $71.3 million and a non-GAAP gross margin of 36.9%. However, the company faced an adjusted EBITDA of negative $3.1 million. To bolster their financial standing, Quantum secured additional liquidity of over $25 million through an agreement with lenders. The company's net debt position was stated to be $94.3 million.
Looking forward, Quantum's guidance for Q2 includes approximately $73 million in revenue and a breakeven adjusted EBITDA. The company also anticipates new product launches in the second half of the year. Despite facing financial challenges, Quantum remains committed to enhancing its profitability through restructuring initiatives and product innovation.
InvestingPro Insights
Amidst Quantum Corporation's recent announcement of a 1-for-20 reverse stock split, a glance at the company's financial health through InvestingPro metrics paints a broader picture of its market position. Quantum, with a market capitalization of $20.11 million, is grappling with significant financial challenges. The company's revenue has seen a substantial decline, dropping by 30.43% over the last twelve months as of Q1 2025, highlighting potential concerns about its sales strategies and market demand for its products.
Moreover, the company's stock performance has been underwhelming, with a precipitous 64.26% drop in the one-year total return period leading up to late 2024. This steep decline is indicative of investor sentiment and market reactions to Quantum's financial and operational developments. The current price of the stock stands at $0.21, which is a mere 23.33% of its 52-week high—underscoring the volatility and the downward pressure it has faced.
InvestingPro Tips reveal that Quantum operates with a significant debt burden and is quickly burning through cash, which are critical factors for investors to consider, especially in light of the reverse stock split. The company's stock is also characterized by high price volatility, which could be a double-edged sword for traders looking for short-term opportunities but poses a risk for long-term investors seeking stability.
For those interested in diving deeper into Quantum's financials and stock performance, InvestingPro offers a comprehensive set of additional tips. Currently, there are 19 more InvestingPro Tips available for Quantum Corporation at https://www.investing.com/pro/QMCO, which can provide investors with a more detailed analysis to help inform their investment decisions.
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