Hyperscale Data, Inc. (NYSE American: GPUS), a company specializing in electronic components, has announced a reverse stock split of its Class A common stock. The split, approved by a special committee of the Board following stockholder authorization during the annual meeting on June 28, 2024, will consolidate every thirty-five shares into one.
Effective as of 11:59 PM ET on Friday, November 22, 2024, the reverse stock split will be reflected in the State of Delaware, where the company is incorporated. Trading on a split-adjusted basis will commence on Monday, November 25, 2024, under a new CUSIP number 09175M 804. The reverse split aims to reduce the number of shares from approximately 38.8 million to about 1.1 million. There will be no change in the number of authorized shares or the par value per share.
As a result of the reverse stock split, all options, warrants, and similar instruments convertible into or exchangeable for shares of common stock will be proportionally adjusted to reflect the consolidation. This corporate action is based on a filing with the Securities and Exchange Commission.
The company, formerly known as Ault Alliance, Inc., BitNile Holdings, Inc., and Ault Global Holdings, Inc., has undergone several name changes, with the latest occurring on January 3, 2023. Hyperscale Data's headquarters are located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV, and the company operates under the industrial classification of Electronic Components, NEC (3679).
In other recent news, Hyperscale Data, Inc. has been notably active in expanding its equity. The company has engaged in a series of private equity sales, including the issuance of Series C convertible preferred stock and corresponding warrants to Ault & Company, Inc. So far, the aggregate investment from these transactions has reached $46.53 million, with the potential to reach up to $75 million.
These transactions are part of Hyperscale Data's strategic financial maneuvers to strengthen its capital structure and facilitate its operations and potential expansion. In addition to these equity sales, Hyperscale Data has sold a real estate property in St. Petersburg, Florida for $13.2 million, with $11 million of the sales price deposited into an account benefiting its senior secured lenders.
The company is also focusing on enhancing its data center operations, specifically its artificial intelligence (AI) data center in Michigan. Plans are in motion for the facility's capacity to increase from approximately 30 megawatts to 300 megawatts, contingent on regulatory approvals and financing. This aligns with Goldman Sachs (NYSE:GS)' analysis, suggesting a potential 160% surge in data center power demand driven by AI.
Furthermore, Hyperscale Data's shareholders have approved the conversion of a 10% OID Convertible Promissory Note into common stock. This decision aligns with the company's recent rebranding and strategic shift towards data center operations. These are the latest developments in Hyperscale Data's ongoing activity in the electronic components sector.
InvestingPro Insights
Hyperscale Data's recent decision to implement a reverse stock split comes amidst challenging financial circumstances, as revealed by InvestingPro data. The company's market capitalization stands at a modest $6.99 million, reflecting its current struggles. InvestingPro Tips highlight that the company is operating with a significant debt burden and may have trouble making interest payments, which could explain the need for this corporate action.
The stock's performance has been notably poor, with InvestingPro data showing a staggering 93.84% decline in the one-year price total return. This aligns with the InvestingPro Tip indicating that the stock price has fallen significantly over the last year. The company's financial health appears precarious, with another tip noting that Hyperscale Data is quickly burning through cash.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for Hyperscale Data, providing a deeper understanding of the company's financial position and market performance. These insights could be particularly valuable in light of the upcoming reverse stock split and its potential implications for shareholders.
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