Bitcoin Firm Nakamoto Plans 1-for-40 Reverse Stock Split After Losing 99% of Its Value — Here's What That Actually Means
83d ago · 1 source
Nakamoto, a Bitcoin-focused company, is planning a 1-for-40 reverse stock split after its share price collapsed by approximately 99%. The move is typically used by companies trying to avoid being delisted from stock exchanges by artificially boosting their per-share price. The dramatic decline raises serious questions about the company's viability and the risks of investing in crypto-adjacent public equities.
WHY IT MATTERS
Imagine you own 40 slices of a pizza, but each slice has become almost worthless. A reverse stock split is like combining all 40 slices back into one bigger slice — it looks more substantial, but you still have the same total amount of pizza. Companies do this when their stock price drops so low that the stock exchange threatens to kick them off the platform (called 'delisting'). For crypto beginners, this is an important reminder: buying stock in a company that's related to Bitcoin is very different from buying Bitcoin itself. A company can go bankrupt and lose 99% of its value, while Bitcoin continues to exist and trade. Always understand what you're actually investing in.
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