Canadian crypto miner Hive Blockchain (HIVE) said it plans to consolidate its shares on a 5-to-1 ratio to attract institutional investors.
The move will lower outstanding share counts to about 82 million from about 411 million and will be effective on May 20, according to a statement.
“In speaking to shareholders at the numerous conferences I have attended in the past 60 days, it is apparent that some shareholders are finding it challenging to compare HIVE to its industry peers as we have many more shares outstanding,” said Executive Chairman Frank Holmes in the statement.
Consolidation of shares or commonly known as reverse stock split, is a process by which a publicly traded company reduces its share count and increases the price of each outstanding share.
After the consolidation, share price of the stock will be higher and will create more visibility among large investors as many institutional investors, mutual funds in particular, have policies against taking positions in a stock priced under a minimum share price, regardless of the market capitalization, Holmes noted.
“We believe that an increased share price arising from the share consolidation, on the TSX-V and especially the Nasdaq, will enable us to attract a broader range of shareholders, gain increased liquidity and deliver long-term value to investors,” said CFO Darcy Daubaras.
The miner’s shares fell about 55% with other mining peers and traded around $1.19-each as of May 10 close. The stock fell about 6% on Tuesday’s early trading as most crypto-linked stocks tumbled with bitcoin falling below $30,000 after U.S. CPI data.