Canadian crypto miner Hive Blockchain (HIVE) plans to consolidate its shares at a ratio of 5:1 to attract institutional investors.
- The move will reduce the number of outstanding shares from about 411 million to about 82 million and will take effect May 20, according to a statement.
- "In conversations with shareholders at the numerous conferences I have attended over the past 60 days, it has become clear that some shareholders find it difficult to compare HIVE to other companies in the industry because we have many more shares outstanding," Executive Chairman Frank Holmes said in the statement.
- A reverse stock split, also known as a consolidation, is a process in which a publicly traded company reduces the number of its shares and increases the price of each outstanding share.
- After the consolidation, the stock price will be higher and attract more attention from large investors because many institutional investors, especially mutual funds, do not take positions in stocks priced below a minimum price, regardless of market capitalization, Holmes said.
- "We believe that a higher share price as a result of share consolidation on the TSX-V and especially on the Nasdaq will enable us to attract a broader range of shareholders, achieve greater liquidity and provide long-term value to investors," CFO Darcy Daubaras said.
- The miner's shares fell about 55% compared to other miners, trading for $1.19 per share at the close on May 10. The stock fell about 6% in early trading Tuesday as most crypto stocks declined and bitcoin fell below $30,000 in the U.S., according to CPI data.