Danbury-based FuelCell Energy announced Thursday morning that it will implement a one-for-30 reverse stock split of its issued and outstanding shares at 5 p.m. Friday.
Last week, shareholders voted in favor of the reverse stock split during a special meeting, despite opposition from a group of investors.
About 65.8% of votes were in favor of the reverse stock split, with 33.4% against it.
The vote authorized FuelCell to set the reverse stock split ratio at a range of between one-for-10 shares to one-for-30 shares.
The company opted for the one-for-30 ratio, which means stockholders will receive one share for every 30 they own. The total value of their holdings will remain unchanged.
Trading on a post-split basis will begin Monday, the company said.
By consolidating the number of existing shares into fewer, higher-priced shares, the company seeks to increase its share price above $1 to prevent delisting from the Nasdaq.
Fintech entrepreneur Steve Roach, a FuelCell investor who opposed the reverse stock split, said Thursday morning that he remains “shocked” that the company’s management “continues to ignore its retail shareholders.”
Reverse stock splits are often viewed with skepticism because they can signal financial instability, he said.
“Many investors worry that such a move, while temporarily solving the low-price issue, can dilute the stock’s value in the long run, leaving shareholders with diminished returns and fewer shares,” Roach said.
In October 2023, FuelCell exacerbated the situation for shareholders, Roach said, by doubling its number of authorized shares from from 500 million to 1 billion.
As of Monday morning, FuelCell shares were trading at 30 cents, down 13% from Wednesday.
FuelCell has previously said that it is taking “proactive steps” to keep its finances strong while also focusing on its efforts to capitalize on the “energy transition and the growing distributed power generation opportunity.”
