LogicMark (NASDAQ: LMGK) stock will rise around 2,000% to day. In nominal terms this will please many as the stock has fallen 93% over the past 12 months and 99.3% over the past 5 years. Even more than that from its peaks around $22 in 2021. However, this will be a purely nominal pleasure, not a real one, as this rise will be the result of a reverse stock split, a 1 for 20.
LogicMark we'd think would do better than this as it's in one of those sexy areas, developing the Internet of Things, IoD. Plugging together internet connected devices and using them to make connected care systems. Personal emergency response systems and the like. You know the sort of (and it is just sort of) thing, Granny falls over and can press a button to summon help. The new technology, an ageing population and so on, we'd think it should all work. Indeed, it's a perfectly sensible thing to try. It's just that LogicMark doesn't seem all that good at doing it. In the latest accounts on revenues of $12 million they lost $7 million. And $9 million of their costs were “general and administrative”. We'd not say it leaps out at us that the company is being run for the benefit of stockholders.
LogicMark stock price from NASDAQ
As generally happens years of this sort of performance have sunk the stock price down to the pennies level - $0.13 a piece on Friday. This causes a problem for the company. It has cash but will run out soon enough, therefore it might well need more capital. Losing the NASDAQ quotation will make that considerably more difficult - but you can't keep your NASDAQ quotation as a penny stock. There's no particular reason for this, no objective fact, it's a fashion or custom in the American markets. Penny stocks are considered not quite right, not wholly respectable, therefore there's a minimum bid price ($1) on both NASDAQ and the NYSE. Be bel9ow that for long enough and you lose the quotation.
The answer is to have that reverse stock split, a consolidation. What was 20 pieces of stock becomes, today, 1 piece. The price should go up 2,000% as a result. Thus our prediction. This is a purely nominal change though, nothing of any great importance has changed. The real price change will be however much LGMK doesn't change by 2,000%.