David Bailey’s Nakamoto Eyes Reverse Stock Split to Avoid Nasdaq Delisting

Key Takeaways

The company’s shares, trading near $0.21, have fallen well below the exchange’s $1 minimum listing requirement. The stock is down about 79% from that threshold and nearly 99% from its peak of $34, according to a preliminary proxy filing dated April 7.

Nasdaq rules require listed companies to maintain a closing bid price of at least $1 for 10 consecutive trading days. Nakamoto has until June 8 to regain compliance after receiving a deficiency notice in December 2025. Failure to do so could trigger a transfer to a lower-tier market or eventual delisting.

To address the issue, the company is proposing a reverse stock split, a mechanism that reduces the number of outstanding shares while increasing the price per share. For example, in a 1-for-20 split, every 20 shares would be consolidated into one, raising the share price proportionally without changing the overall value of holdings.

While such measures can help companies meet listing standards, they are often viewed by investors as a cosmetic fix that does little to resolve underlying weaknesses.

The proposed reverse split would consolidate the company’s roughly 690 million outstanding shares. However, Nakamoto plans to keep its authorized share count unchanged at 10 billion, leaving room for significant future issuance.

That prospect raises the risk of further dilution. The company acknowledged in its filing that issuing additional shares could weigh on its stock price and reduce the value of existing holdings.

Management framed the reverse stock split as a tool to maintain strategic flexibility. “We believe that approval of the reverse stock split proposal would provide the company with additional flexibility to address the minimum bid price requirement,” the filing said.