Shares of National CineMedia Inc. (NASDAQ: NCMI) experienced a slight decline of 1.3% in midday trading on Thursday following the company's declaration of a 1-for-10 reverse stock split. The split is scheduled to take effect at the opening of the market on August 4th. National CineMedia expects this split to help them regain compliance with the Nasdaq's minimum average closing price requirement of $1.
Reverse Stock Split Details
Under the terms of the split, which would value the stock at approximately $3.43 based on current prices, each shareholder will have their 10 shares consolidated into one share. Shareholders who are entitled to receive fractional shares will receive rounded shares instead.
Analyst Downgrades National CineMedia Inc. to Neutral
Earlier on Thursday, Wedbush analyst Alicia Reese downgraded National CineMedia Inc. from "outperform" to "neutral." In a note to clients, Reese highlighted the challenges the company faces in the advertising industry and how these obstacles continue to overshadow the potential upside from the recovering box office.
Stock Performance and Outlook
Despite experiencing a phenomenal 226.5% surge since hitting a record low of 10.5 cents on March 17, 2023, the stock has still endured an 80.7% decline over the past year. In comparison, the S&P 500 index has achieved an 8.7% gain during the same period.
National CineMedia Inc. remains focused on restructuring its operations in order to navigate through the difficult advertising environment and maximize future growth opportunities.