Allbirds plans to complete a 1-for-20 reverse stock split at 5 p.m. ET on Wednesday, according to a company press release. The financial maneuver, which will trade every 20 shares of Allbirds’ class A and class B common stock for one share, was approved by the company’s board of directors in mid-August and is aimed at bringing the retailer back in compliance with the Nasdaq’s minimum bid price requirement.
The decision comes as Allbirds is nearing the end of its grace period from the Nasdaq, which notified the brand in April that it was no longer in compliance with its listing requirements. In order to regain compliance by Sept. 30, Allbirds’ stock has to trade at $1.00 or more for 10 consecutive days.
In connection with the reverse stock split, Allbirds will give cash payments to any stockholders that end up with fractional shares. The company will start trading on a post-split basis on Thursday.
The Container Store, which likewise received a delisting notice from the New York Stock Exchange in May, is also executing a reverse stock split. The home goods retailer is trading every 15 shares for one, effective Tuesday.
Allbirds’ reverse stock split comes amid a tough year for the once-DTC darling, which named a new CEO in March amid plummeting sales and has since executed a host of initiatives to slow the bleeding, including shuttering stores, revamping some of its core footwear styles, narrowing its product assortment and transitioning many of its international markets to a distributor model. Allbirds unveiled a transformation plan in March last year aimed at turning the business around, which included additional goals like slowing store openings, reconnecting with core consumers and improving cash optimization.
With the company’s sales in freefall, the footwear retailer has also turned to job cuts to trim costs and undergone a series of leadership changes to turn things around. The brand named a new CFO last year, and this year brought on a new chief design officer and promoted a marketing exec to chief marketing officer. Just a few months ago, Allbirds also named a new vice president of design.
