Towerstream Corporation (NASDAQ: TWER)
Towerstream has had an interesting go in the market as of late. While the company recently released an overwhelmingly positive business update, concerns have been circling regarding delisting from the NASDAQ. Nonetheless, if you’re concerned about delisting, I have good news for you. The company just processed a reverse stock split, and this is no longer an issue. Today, we’ll talk about the reverse stock split, what we’re seeing in the market, and what we can expect to see from TWER moving forward. So, let’s get right to it…
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TWER Processes Reverse Stock Split
As mentioned above, if you’re concerned about NASDAQ delisting, there’s no longer a reason to be concerned. Towerstream recently announced that it would be processing a reverse stock split. That stock split became active this morning.
The split is a 1-for-20. This means that for every 20 shares investors hold of TWER, they will receive 1 newly issued share. The reason for the split is pretty simple. The company was out of compliance with NASDAQ. According to NASDAQ Listing Rules, traded companies must maintain a minimum closing bid price of $1.00 per share.
As a result of the stock split, TWER will have a drastically reduced number of shares on the market. Before the split, the company had 90,333,000 outstanding shares. However, following the split, there are only 4,517,000 shares in the open market.
With the split in mind, the total number of common stock shares held by shareholders will be converted automatically. It is also important to mention that no fractional shares, cash or other considerations will be provided to shareholders. Instead, Towerstream said that if the split leaves a shareholder with a fractional share, they will automatically be given one whole share.
What We’re Seeing In The Market
As investors, we know that the news moves the market. Positive news generally leads to gains while negative news generally leads to declines. While the company is avoiding delisting, and that’s great news, investors are perceiving the split as negative. This can be seen in the declines that we’re seeing on TWER today. Currently (11:29), the stock is trading at $2.56 per share after a loss of $0.16 per share, or 5.74%, so far today.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively bullish opinion of what we can expect to see from TWER. The reality is that, while the company has faced some hardships, things seem to be going in the right direction. Recently, the company released an update. Not only did the update show that adoption of its services in high-rise commercial buildings is growing, but it also showed that profit per contract was on the rise. Not to mention, they recently signed a contract with a large commercial property holder in New York City to provide high-speed internet services. All in all, Towerstream seems to be making the right moves. So, I’m expecting to see long-run gains.
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What Do You Think?
Where do you think TWER is headed moving forward and why? Join the discussion at TalkTRENDZ from CNA Finance!
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