By Will Feuer
Shares of Synthetic Biologics Inc. fell more than 30% on Friday after the clinical-stage therapeutics company said it established a 1-for-10 reverse stock split to ensure the company can meet pricing requirements by action to remain listed on NYSE American.
The shares were down 32% in morning trading to 16 cents per share. The stock has fallen nearly 42% so far this year and more than 68% in the past 12 months.
Reverse stock splits, which do not affect the fundamental operations of a company, reduce the total number of shares of a stock and proportionally increase the stock price per share.
The stock will begin trading on an allocation-adjusted basis on July 25, the company said. The reverse stock split was authorized by the company’s board of directors on July 11.
The number of common shares outstanding will be reduced from 158.4 million shares to 15.8 million shares.
The company said it will not issue any stock splits following the reverse stock split. Shareholders who would be entitled to a fractional share because they hold a number of shares not evenly divisible by the ratio of 1:10 will automatically be entitled to receive an additional fractional share of the common shares of the company to be rounded up to the next whole share.
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