TAMPA, FL - Upexi, Inc. (NASDAQ:UPXI), a diversified owner of Amazon (NASDAQ:AMZN) and Direct-to-Consumer brands, is currently examining unusual trading activity following its recent reverse stock split. The company, which underwent the stock consolidation on September 27, 2024, reported a substantial increase in shareholder numbers in the days immediately after the announcement.
Before the reverse split was publicly disclosed, Upexi had fewer than 5,000 shareholders. However, subsequent to the split, five brokerage firms have sought approximately 199,059 roundup shares, a figure representing nearly 19% of Upexi's post-split outstanding common stock. The total roundup shares requested amounted to 202,183, marking a fortyfold increase in the number of individual shareholders.
The company's CEO, Allan Marshall, expressed Upexi's commitment to addressing this matter thoroughly to safeguard its shareholders and to assist other listed companies in preventing similar issues. The trading activity in question took place within a three-day window between the reverse split announcement and its effective date, raising concerns about potential stock manipulation.
Upexi's legal team is actively reviewing the trades in question to determine the presence of any manipulative practices. The outcome of this investigation could have implications for the company's shareholders and the broader market.
The company, which has a portfolio that includes brands in health, wellness, pet, and beauty markets, aims to drive organic growth and has been acquiring profitable Amazon and eCommerce businesses to scale operations and achieve cost synergies.
It is important to note that the information provided is based on a press release statement, and the investigation into the trading activity is ongoing. Upexi has not provided further details on the potential implications or outcomes of their review at this time.
In other recent news, medicinal chemicals and botanical products company, UPEXI, Inc., has made substantial strides in its restructuring efforts, reducing its debt by $16.1 million through asset sales and operational consolidation. The company has also approved a 20-to-1 reverse stock split to meet NASDAQ's minimum share price requirements, aiming to reduce the number of shares in circulation and increase the per-share price. These are among the latest developments for UPEXI.
The company received an additional 180-day period to meet the NASDAQ Capital Market's minimum bid price requirement, according to its recent SEC filing. UPEXI is also addressing a NASDAQ compliance issue by planning to file the required Form 10-Q. To ensure financial transparency, UPEXI has engaged GBQ Partners LLC to audit its financial statements for the fiscal years ending June 30, 2023, and 2024.
UPEXI's recent transactions include the sale of E-core/Neti and Tytan Tiles, which decreased debt by approximately $12 million and added $2 million in cash. The sale of a Clearwater, Florida warehouse also contributed to this reduction, eliminating around $2.6 million in debt and adding $1.4 million to working capital. This restructuring is part of UPEXI's strategic initiatives to consolidate operations, expecting to cut annual operating expenses by $2 to $3 million.
InvestingPro Insights
Upexi's recent trading activity and reverse stock split have drawn significant attention, and InvestingPro data provides additional context to the company's financial situation. As of the last twelve months ending Q3 2024, Upexi reported revenue of $83.98 million, with a notable revenue growth of 27.11%. However, this growth is tempered by a quarterly revenue decline of 33.99% in Q3 2024, indicating recent challenges.
The company's financial health appears precarious, as highlighted by several InvestingPro Tips. Upexi is operating with a significant debt burden and may have trouble making interest payments. This is particularly concerning given that the company is not profitable over the last twelve months, with a negative operating income of $9.61 million.
The market's reaction to these financial challenges is evident in Upexi's stock performance. InvestingPro data shows that the stock has taken a significant hit, with a 32.37% decline over the past month and a staggering 87.07% drop year-to-date. This aligns with the InvestingPro Tip indicating that the stock has fared poorly over the last month and has fallen significantly over the last year.
Despite these challenges, Upexi is trading at a low Price / Book multiple of 0.14, which could potentially interest value investors. However, this should be weighed against the company's financial struggles and market performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for Upexi, providing a deeper understanding of the company's financial position and market outlook.
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