DropCar Inc (NASDAQ: DCAR) is headed up in the pre-market hours this morning, and for good reason. The company announced a couple of updates, including the exploration of strategic options. Today, we’ll talk about:
- The updates that are sending DCAR stock up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
DCAR Stock Gains On Update
As mentioned above, DropCar is having a strong start to the trading session in the pre-market hours this morning after announcing a two part update. In a press release, the company said that it would be moving forward with a reverse stock split and a strategic options exploration.
In terms of the reverse stock split, the split will be a 1:6, meaning that for ever 6 shares of common stock owned, the company will provide one share at six times the value. DCAR said that the reverse stock split comes on the heels of a recent announcement regarding Nasdaq compliance deficiencies. The split will remedy these deficiencies.
Also, the company said that it will be exploring strategic alternatives in an attempt to maximize shareholder values. According to the release, the company will consider a range of options including potential mergers.
In a statement, Spencer Richardson, CEO at DCAR, had the following to offer:
The Board of Directors and management believe that now is the right time to review strategic opportunities in order to assess how best to maximize value for our shareholders. During this process, the DropCar team will remain focused on our current business operations.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. When it comes to DropCar, the news proved to be positive.
While a reverse stock splits are not usually exciting, this one will remedy a Nasdaq compliance issue. Moreover, the declines that this may have caused have been outweighted by gains associated with the strategic options exploration.
As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:00), DCAR is trading at $0.54 per share after a gain of $0.035 per share or 6.96% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on DCAR. In particular, we’re interested in following the strategic options exploration and seeing if it ends in a takeover. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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