RESEARCH TRIANGLE PARK, N.C. - Charles & Colvard, Ltd. (NASDAQ:CTHR), a leader in fine jewelry with a focus on moissanite and lab-grown diamonds, has announced a reverse stock split of its common stock at a ratio of one-for-ten, set to take effect at the start of trading on Thursday, May 17, 2024. The move is aimed at maintaining compliance with the Nasdaq's minimum bid price requirement for continued listing.
The decision was made following shareholder approval at a special meeting on May 7, 2024, to amend the Company's Restated Articles of Incorporation to allow for a reverse stock split within a range of one-for-ten to one-for-fifteen as deemed appropriate by the Board of Directors. The Articles of Amendment were filed with the North Carolina Secretary of State on May 14, 2024.
The reverse stock split will reduce the number of outstanding shares from approximately 30.3 million to about 3 million. The total authorized shares will not change, and fractional shares resulting from the split will be rounded up to the nearest whole share. No par value will be assigned to the common stock post-split, and no further shareholder action is required for the implementation.
Equiniti Trust Company, LLC, the Company's transfer agent, will provide instructions to shareholders on exchanging physical stock certificates for split-adjusted shares. Those who hold shares in "street name" or in book-entry form will have their accounts automatically adjusted.
Proportionate adjustments will also be made to all outstanding Equity Awards under the Company's Stock Incentive Plans, with a corresponding decrease in the number of shares reserved for issuance upon the exercise of such awards. Financial statements and notes will be retroactively adjusted to reflect the reverse stock split for all periods presented.
The information in this article is based on a press release statement from Charles & Colvard, Ltd.
InvestingPro Insights
In light of Charles & Colvard's recent reverse stock split announcement, a glimpse at the company's financial health through InvestingPro data reveals some challenges and potential areas of interest for investors. Currently, Charles & Colvard holds a market capitalization of $8.59 million USD, which is relatively small in the jewelry industry. The company's Price / Book ratio, as of the last twelve months leading up to Q3 2024, stands at a low 0.28, indicating that the stock may be undervalued relative to its assets.
Despite a challenging revenue growth rate of -29.69% over the same period, analysts anticipate sales growth in the current year, according to one of the InvestingPro Tips. This could signal a potential turnaround or growth opportunity for the company. Moreover, Charles & Colvard's liquid assets exceed its short-term obligations, suggesting a level of financial stability in the near term.
Investors might also note that the company's stock is trading near its 52-week low, with a price that is 28.89% of the 52-week high. This could represent an entry point for those who believe in the company's future prospects and are looking for a discount on the stock.
For those interested in a deeper analysis, there are additional InvestingPro Tips available that can provide further insights into Charles & Colvard's financials and stock performance. Subscribers can access these tips on InvestingPro's platform, and new users can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 11 more InvestingPro Tips available, investors can gain a comprehensive understanding of the company's financial position and potential investment opportunities.
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