Sonder Proposes Reverse Stock Split to Stay Listed on Nasdaq

After receiving a notice from Nasdaq in April that its shares could be delisted because their price had dipped below $1 per share for 30 trading days in a row, Sonder announced it is asking shareholders to approve a reverse stock split.

That wouldn’t in itself impact Sonder’s valuation, but would get its share price way higher than a buck per share.

Sonder, which announced the proposal Monday to employees and filed a preliminary proxy statement on Friday, detailed how it might work in an employee email:

“For example: If you own 100 shares of common stock where the value of each share was $10 per share, your investment is worth $1000. In a 1-for-10 reverse stock split, you would instead own 10 shares (divide the number of your shares by ten) and the share price would increase to $100 per share (multiply the share price by ten). Your investment is worth $1000 either way and will fluctuate from there of course.”

The actual split would be approved by the board, and it could be “1-for-10, 1-for-15, 1-for-20 or 1-for-25,” Sonder stated in the proxy filing.  

The company said it had 180 days from receiving that Nasdaq deficiency notification in April to get back into “compliance, and we’re working towards this.”

Sonder said its primary goal in the interim ” is to achieve sustainable cash flow positivity as soon as possible. We believe this will create long-term value for our stockholders.”

Sonder announced Monday that Chief Accounting Officer Chris Berry will be leaving the company August 18 to “to pursue a new professional opportunity,” and that Chief Financial Officer Dominique Bourgault will take on the additional role of principal accounting officer.