View (NASDAQ: VIEW) stock is up 6,000% and change this morning. Sadly, this is purely a nominal change, not one that makes much difference except in a purely technical sense. Another - slightly misleading but true all the same - way of describing it is that VIEW stock is up 60 x today precisely because it has fallen 93% over the past 12 months.
As to what is actually done at View: “View, Inc., a technology company, manufactures and sells smart building products. Its product portfolio includes View Smart Glass that comprise electrochromic glass panels in the form of insulating glass units; Controls, Software and Services, a network infrastructure comprising wiring and controls system that provides a network addressable location, as well as software and algorithms that control the behavior of glass panel in real time;” and so on. It's the application of new techs to that old activity, shelter. The problem is that View doesn't do this very well. Or, perhaps, not well enough to be creating value for shareholders. Thus that 93% decline in the stock value this past year.
View stock price from NASDAQ
The problem with a stock price at 13 cents is that the American markets have this little fashion, cultural tic. Penny stocks are associated with being disreputable. Not because all penny stocks are disreputable but because those who are disreputable and want to play around with stocks and their prices tend to do so in penny stocks.
So, you can't stay on the main US exchanges (NASDAQ and NYSE) as a penny stock. That means relegation to the OTC, lower liquidity, a lower stock price from that and then it also becomes more difficult to raise new capital.
There is a solution to this, simply declare that - say - 60 old shares are now one new one. Just what has just been done here: “ View, Inc. (Nasdaq: VIEW) (“View” or the “Company”) today announced that on July 26, 2023, View filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company's Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) with the Secretary of State of the State of Delaware to effect a 60-for-1 reverse stock split of the outstanding shares of the Company's Class A common stock”
The company's worth what it was before, what's changed is the number of pieces of stock that make it up. Thus, entirely mechanically, the stock price goes up by 60x, or 6,000%.
