Hut 8-Backed American Bitcoin To Slash Share Count By More Than 90% In Reverse Split

Even as Bitcoin miners embrace AI and high-performance computing, the crypto market downturn continues to put pressure on them.

• American Bitcoin announced that it will implement a 1-for-15 reverse stock split after market close on Thursday.
• The move is designed to help maintain Nasdaq listing compliance by raising the company's share price above the exchange's minimum bid requirement.
• The reverse split will reduce outstanding shares from 1.09 billion to 73 million.

American Bitcoin Corp. (ABTC) announced on Wednesday that the firm's planned 1-for-15 reverse stock split would take effect after the market closes on Thursday, a move aimed at lifting its share price enough to keep its Nasdaq (NDAQ) listing.

Under the split, every 15 shares of the company's Class A and Class B common stock would be reclassified into a single share, reducing outstanding shares from about 1.09 billion to roughly 73 million. The number of outstanding shares is reduced by roughly 93.3%, leaving about 6.7% of the original share count. 

American Bitcoin Corp, a majority-owned subsidiary of miner Hut 8 (HUT), expected its Class A common stock to begin trading on a split-adjusted basis on the Nasdaq Capital Market when markets open on July 6, under the same ABTC ticker and a new CUSIP number.

The move will not change the number of authorized shares or the par value of the stock. No fractional shares will be issued, and holders will receive a cash payment instead of any fractions.

Meeting Nasdaq's Bid Rule

American Bitcoin said the reverse split is primarily intended to raise its per-share price to meet Nasdaq's minimum bid price requirement. To remain listed on the exchange, a company generally must maintain a minimum closing bid price of $1 per share. If a stock trades below that level for 30 consecutive business days, Nasdaq typically issues a deficiency notice, after which the company is given a set period, usually 180 days, to regain compliance, often by executing a reverse split.

A reverse stock split reduces a company's number of outstanding shares while proportionally increasing the price of each remaining share, leaving the total value of an investor's holding unchanged. 

Registered holders do not need to take any action to receive post-split shares, and positions held through brokers will be adjusted automatically, the company said.

How Retail Traders Are Reacting?

ABTC stock was trading at $0.65, down over 5% and well below the $1 threshold during mid-morning trading. On Stocktwits, the retail sentiment around ABTC moved to the ‘neutral’ zone from the ‘bearish’ zone, while chatter around it stayed at the ‘high’ levels over the past day.

On Stocktwits, one user tagged the move as "Bearish," saying the stock is losing value faster than expected and that the 40:1 split "is beginning to not look like enough" -- implying skepticism it'll be enough to hold the price. 

Another user pushed back harder, noting that Gryphon also did a reverse split when it rebranded to ABTC less than a year ago, calling this second reverse split "shady" and the company "stealing from retail again" via repeated share consolidations.

The split comes as Bitcoin miners navigate the cryptocurrency's decline, weighing on the sector, and as analysts argue the market has been slow to credit miners' pivots into AI and high-performance computing infrastructure.

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