Ten months after Beasley Media Group received a warning from the Nasdaq stock market to bring its stock price above the minimum value to remain on the marketplace, the company has taken the first step to a reverse stock split, according to an SEC filing.
A reverse stock split has already been approved by written consent of majority shareholders, foregoing the need for a conventional stockholder meeting. The proposed action aims to consolidate shares at a ratio between 1-for-5 and 1-for-20. The Board of Directors will determine the exact ratio of the reverse stock split and the timing of its implementation, though it could only happen in mid-September at the earliest.
The total number of outstanding common stock shares currently issued to shareholders by the company is 30,705,218. A 1-for-5 ratio would result in 6,141,044 shares, a 1-for-12 ratio would leave 2,558,768 shares, and a 1-for-20 ratio would reduce the count to 1,535,261 shares.
Beasley shares, which trade under BBGI, fell below the $1.00 share price required by Nasdaq at the market’s close on August 31, and – despite a January rally – have never climbed back over the threshold. As of Friday, August 23, the price per share was sitting at $0.67.
While the reverse stock split aims to increase the share price, it does not inherently alter the company’s market capitalization or the overall value of Beasley Media. Shareholders who end up with fractional shares as a result of the reverse stock split will receive cash in lieu of their fractional shares, potentially reducing the total number of shareholders.
Beasley is not the only broadcaster to face a decision like this. In June 2023, Audacy also instituted a 1-for-30 reverse stock split to regain compliance with the New York Stock Exchange, before the company filed for bankruptcy in January of this year. In October 2016, Cumulus approved a 1-for-8 reverse stock split.
