Powerbridge Technologies (NASDAQ: PBTS) stock should jump 800% at the open. PBTS stock rising 8x might be thought to be a good thing. But unless we’ve got this completely wrong they tried the same trick a couple of months back and it didn’t work then. So, there’s a certain suspicion about whether it will work now of course. As we say, that’s if we’ve got this right. But we’re pretty sure we have. We have observed these events and written about them and no one’s told us we were wrong then.
The issue is that Nasdaq has a $1 minimum bid price. The reason for this is simply fashion - or perhaps culture. Penny stocks just don’t do it for the Americans. It’s not that all penny stocks are frauds run by charlatans - but when there are charlatans running frauds then they tend to be in penny stocks. So, you cannot be a penny stock and remain for long on the main markets, NYSE and Nasdaq.
That’s OK, there’s an easy enough solution, simply declare that 8 old shares are now one new one, a one for 8 reverse stock split: “Powerbridge Technologies Co., Ltd. (PBTS) will effect a one-for-eight (1-8) reverse split and par value change of its Ordinary Shares. The reverse stock split and par value change from USD $0.05 to USD $0.40 will become effective on Friday, September 22, 2023.” This doesn’t change the value of the company, just the number of shares. So the stock price should react mechanically, up 800% or 8x. Job done, no longer a penny stock.
Powerbridge Technologies stock price from Google Finance
We’ve talked before about Powerbridge Technologies: “Powerbridge Technologies (NASDAQ: PBTS) stock will jump 3,000% or so at the open this morning. A 30 times stock price rise is nice to have but it does need to be a change in the real price to properly gain our attention. This isn't a change in the real price, this is a nominal price change.” That’s from June. For the thing is, you see, that they’ve already done this, already had a reverse stock split this year.
The results were not pretty at Powerbridge: “Powerbridge Technologies (NASDAQ: PBTS) stock was down at only 15 cents. Sure, PBTS stock then rose 70% yesterday and is falling back today. But what really impresses us here is that this is all only two months after a reverse stock split, a stock consolidation, meant to get that price back up above the NASDAQ $1 minimum bid price. Clearly, the increase in price differentiation just meant that more people took a look and left.”
As we say, we find this hard to believe but as far as we can see, it’s true. Powerbridge is having its second reverse stock split in four months. Who knows, it might actually work this time - or, of course, it might not again.