American Bitcoin (NASDAQ: $ABTC) has conducted a controversial reverse stock split to avoid being delisted from the Nasdaq (NASDAQ: $NDAQ) exchange on which its shares trade.
American Bitcoin is the Bitcoin (CRYPTO: $BTC) mining company co-founded by U.S. President Donald Trump’s son Eric and majority-owned by Canada’s Hut 8 (NASDAQ: $HUT).
The company’s shares are currently trading at $0.56 U.S. per share, having fallen 91% since going public last year.
The current share price puts American Bitcoin in danger of being delisted form the Nasdaq, which requires companies to keep their share price above $1 U.S.
To fix the problem and avoid delisting, American Bitcoin executed a reverse 1-for-15 stock split on July 2, artificially lifting its stock price back above the Nasdaq’s minimum threshold.
ABTC stock will begin trading on a split-adjusted basis when U.S. markets reopen on July 6.
Reverse stock splits tend to be frowned upon by investors who view them as artificially boosting a share price without fixing the underlying problems at a company.
The move will shrink American Bitcoin’s total share count from 1.09 billion to about 73 million. The shares are expected to begin trading on July 6 at $8.40 U.S.
American Bitcoin runs large-scale mining operations while accumulating Bitcoin on its balance sheet.
The company went public through a special purpose acquisition company (SPAC) merger last September as part of a push by Hut 8 to buildout American Bitcoin’s infrastructure.
However, ABTC stock has steadily declined as Bitcoin’s price fell from an all-time high of $126,000 U.S. last October to $58,000 U.S. in June of this year.
HUT stock has risen 344% in the last 12 months to trade at $97.14 U.S. per share.
