At a special meeting Wednesday, Cumulus stockholders voted to approve a 1-for-8 reverse stock split of each class of the Company’s issued and outstanding common stock. Upon the effectiveness of the reverse stock split, every 8 shares of each class of Cumulus common stock will be converted into 1 share of the same class of such common stock. The reverse stock split is being implemented primarily to increase the trading price of the Company’s Class A common stock to permit the Company to regain compliance with NASDAQ listing requirements and to enhance the liquidity of the Class A common stock.
The reverse split is expected to become effective at 5:00 p.m. on October 12, 2016, and the Company’s split-adjusted Class A common stock is expected to begin trading on The NASDAQ Capital Market on October 13, 2016. There will be no change in the Company’s NASDAQ ticker symbol (CMLS) as a result of the reverse stock split. The new CUSIP number that will be applicable to the Class A common stock after the reverse stock split is 231082603.
My old company, DG Systems did this. It means that the stock has fallen so low that Nasdaq is about to de-list the company so Cumulus takes back 8 shares and give you one instead to pump up the stock price and prevent delisting. Shareholder loses some liquidity but by now, the price is so low that nobody is buying or selling anyway.