Movano Health Provides Update on Investigation to Expose Apparent Stock Manipulation Following Reverse Stock Split
Rhea-AI Summary
Movano Health (MOVE) is investigating apparent stock manipulation following its recent reverse stock split. The company detected suspicious trading activity between October 25-29, 2024, involving numerous single-share transactions seemingly aimed at exploiting the fractional shares round-up convention. Movano identified this activity before any round-up shares were issued and maintains its expected post-split outstanding shares at approximately 6.6 million. The company is working with securities regulators and legal advisors to address this issue, noting that other small-cap stocks have faced similar manipulation attempts following their reverse splits.
Positive
- Company proactively identified and prevented potential stock manipulation before round-up shares were issued
Negative
- Detection of apparent stock manipulation attempt following reverse stock split announcement
- Company faces potential security and trading integrity concerns
Insights
The investigation into potential stock manipulation following Movano Health's reverse stock split represents a significant regulatory concern. The suspected scheme of executing numerous single-share transactions to exploit the fractional share rounding mechanism is a sophisticated form of market manipulation that could have diluted existing shareholder value. The company's proactive detection before any round-up shares were issued prevented potential share dilution and demonstrates strong corporate governance.
The broader implication of similar manipulation attempts affecting other small-cap companies suggests a concerning pattern that may prompt increased regulatory scrutiny and potential policy changes regarding reverse split procedures. The company's engagement with securities regulators and collaboration with other affected companies could lead to enhanced protective measures for small-cap stocks undergoing corporate actions.
The attempted manipulation highlights vulnerabilities in small-cap stocks during corporate restructuring events. With a market cap of just
Small-cap investors should note that while the company prevented immediate damage, the investigation and potential regulatory involvement could create near-term volatility. The collaboration between affected companies may lead to market structure improvements but also signals heightened risks in small-cap reverse split scenarios.
Company Continues to Work with Securities Regulators, Legal Advisors and Other Partners to Protect Interests of Shareholders
Based on its preliminary investigation, the Company believes that between the announcement of the reverse split on October 25, 2024, and its effective date on October 29, 2024, a large number of single share transactions were executed in an apparent attempt to take advantage of the convention of rounding up reverse split fractional shares at the beneficial owner level. The Company was able to uncover this activity before any round up shares were issued and continues to expect the number of common shares outstanding to be approximately 6.6 million following the reverse split.
"We are committed to transparency and protecting the interests of our Company and shareholders," said John Mastrototaro, President and CEO of Movano Health. "It has come to our attention that several small cap stocks have suffered similar manipulation in recent weeks following their respective reverse stock splits. We are in direct communication with securities regulators, legal counsel and other interested partners, including affected companies, as we pursue this issue to the fullest extent necessary."
Additional information regarding the Reverse Stock Split can be found in the Company's definitive proxy statement for the annual meeting of stockholders of the Company held on July 9, 2024, which was filed with the
About Movano Health
Founded in 2018, Movano Inc. (Nasdaq: MOVE) dba Movano Health, maker of the Evie Ring (www.eviering.com), is developing a suite of purpose-driven healthcare solutions to bring medical-grade data to the forefront of wearables. Featuring modern and flexible form factors, Movano Health's devices offer an innovative approach to delivering trusted data to both customers and enterprises, capturing a comprehensive picture of an individual's health data and uniquely translating it into personalized and intelligent insights.
Movano Health is developing its proprietary technologies and wearable medical device solutions to enable the future use of data as a tool to proactively monitor and manage health outcomes across a number of patient populations that exist in healthcare. For more information on Movano Health, visit https://movanohealth.com/.
Forward Looking Statements
This press release contains forward-looking statements concerning our expectations, anticipations, intentions, beliefs, or strategies regarding the future. These forward-looking statements are based on assumptions that we have made as of the date hereof and are subject to known and unknown risks and uncertainties that could cause actual results, conditions, and events to differ materially from those anticipated. Therefore, you should not place undue reliance on forward-looking statements. Examples of forward-looking statements include, among others, statements we make regarding plans with respect to the timing and impact of the Reverse Stock Split, the commercial launches of the Evie Ring and EvieMED Ring; our expectations regarding potential commercial opportunities; planned cost-cutting initiatives; anticipated FDA clearance decisions with respect to our products; expected future operating results; product development and features, product releases, clinical trials and regulatory initiatives; our strategies, positioning and expectations for future events or performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, and in our other reports filed with the Securities and Exchange Commission, including under the caption "Risk Factors." Any forward-looking statement in this release speaks only as of the date of this release. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
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SOURCE Movano
FAQ
What stock manipulation issue is Movano Health (MOVE) investigating in November 2024?
How many shares will Movano Health (MOVE) have outstanding after the October 2024 reverse split?
When did Movano Health (MOVE) implement its reverse stock split in 2024?
