Tivic Health (NASDAQ: TIVC) stock will rise 100x, or 10,000%, at the open. TIVC stock is not going to rise as a result of their sorting the company out. This is, sadly, a purely technical move and not one that will make up for the 98% loss of value over the past 12 months. Nor even deal with the 33% loss just yesterday. This is, as we say, something purely technical, something that affects only the nominal value of Tivic stock, not the value of the company as a whole nor any specific shareholding in it.
As to what’s done at Tivic Health: “Tivic Health Systems Inc. operates as a health technology company, focuses on developing and commercializing non-invasive bioelectronic medicine. Its primary product is ClearUP, a bioelectronic medicine for the treatment of sinus and nasal congestion pains. The company sells its products on direct-to-consumer channel through its own websites; and platforms, such as Amazon.com and Walmart.com” and so on. This isn’t, perhaps, quite as bizarre as it sounds. There is at least limited evidence that this works even if the sales channel reminds more than a little of Ronco and their gadgets.
However, the corporate performance is not so good. They’ve a couple of million $ in cash, expenses of some $2.5 million a quarter and sales of $160k (all rough approximations). That’s not a long term sustainable position of course. And thus that collapsing stock price of course.
Tivic Health Systems stock price from Google Finance
The problem is that they will lose the NASDAQ quote for being a penny stock. In the American culture penny stocks are associated with manipulators and fraudsters. Not because all penny stocks are controlled by such but because when the bad guys do play with stocks they usually do so with penny stocks. Therefore you must meet the $1 minimum bid price to stay on NASDAQ. As can be seen this isn’t true of Tivic at present - therefore something must be done. That something is a reverse stock split - declare that 100 olds shares are now one new one: “a 1-for-20 reverse stock split of the Company’s common stock that will become effective at 11:59 p.m. Eastern Time on August 22, 2023. The Company’s common stock will begin trading on a split-adjusted basis on the New York Stock Exchange (NYSE) when the market opens on August 23, 2023.”
This doesn’t change the value of the company as a whole, just the number of shares that make that up. Therefore the stock price mechanically changes by that 100 times - or 10,000%. This doesn’t solve Tivic Health’s basic business problems but it does maintain the quote.