Sonder announced Tuesday that its 1-for-20 reverse stock split would become legally effective after market close Wednesday, and that its shares would start trading on that basis Thursday morning.
The move is geared to get the stock trading at more than $1 per share in compliance with Nasdaq rules.
“As of the Effective Time, every 20 shares of the Company’s issued and outstanding common stock and every 20 shares of its issued and outstanding special voting common stock will be combined into one issued and outstanding share of common stock or one issued and outstanding share of special voting common stock, respectively,” Sonder announced. “The total number of authorized shares of common stock will be reduced from 400,000,000 to 20,000,000, and the total number of authorized shares of special voting common stock will be reduced from 40,000,000 to 2,000,000.”
Sonder closed trading on Tuesday at $0.34 per share.
The reverse stock split doesn’t change Sonder’s market cap, which was $74.8 million at market close on Tuesday.
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 in July would ask shareholders to approve a reverse stock split, which they did on Friday in a special meeting.
Sonder is among a bevy of SPACS, which saw its share prices tumble, some below $1 per share, after they went public.
The majority of Sonder’s listings are for short-term rentals, but hotel rooms are a growing portion of its portfolio.
It has an advantage in places like New York City, which just clamped down on host registrations for short-term rentals, because Sonder has many hotel licenses, and these are legal.