MSP Recovery Announces Reverse Stock Split to Maintain Compliance with Nasdaq’s Minimum Bid Price Requirement
Rhea-AI Summary
MSP Recovery (NASDAQ: MSPR) has announced a 1-for-7 reverse stock split of its Class A common stock, effective September 1, 2025, at 11:59 PM. The move aims to maintain compliance with Nasdaq's minimum bid price requirement of $1.00 per share.
The company's stock will continue trading under the symbol "MSPR" on the Nasdaq Capital Market, beginning on a split-adjusted basis on September 2, 2025. Following the reverse split, every seven shares will be converted into one share, resulting in approximately 1.02 million shares of Class A common stock outstanding. The new CUSIP number will be 553745-40-7.
Positive
- Helps maintain Nasdaq listing compliance
- Stockholders and board have already approved the action
Negative
- Indicates underlying share price weakness necessitating the reverse split
- May signal potential delisting risk if price doesn't maintain compliance post-split
Insights
MSP Recovery is implementing a 1-for-7 reverse stock split to maintain Nasdaq listing compliance, indicating underlying share price weakness.
MSP Recovery's announcement of a 1-for-7 reverse stock split represents a significant financial restructuring aimed at maintaining compliance with Nasdaq's minimum $1.00 bid price requirement. This mandatory corporate action will reduce the company's outstanding Class A common shares from approximately 7.14 million to just 1.02 million shares, while proportionally increasing the per-share price by a factor of seven.
The reverse split is fundamentally a technical adjustment rather than a change to underlying business value. However, the need for such action reveals concerning market sentiment. Companies typically resort to reverse splits when their share price has declined significantly, often due to fundamental business challenges or market perception issues. The 1-for-7 ratio suggests a substantial decline in MSP Recovery's trading price, likely well below the critical $1 threshold for some time.
While this maneuver temporarily addresses the immediate compliance issue, it doesn't resolve whatever underlying factors drove the share price down initially. The company's focus on Medicare, Medicaid, and commercial payer reimbursement recovery suggests it operates in a complex regulatory environment with potentially lengthy cash conversion cycles.
Investors should note that reverse splits often create selling pressure as the action itself doesn't change company fundamentals. The mechanics of the split will automatically adjust any existing positions without investor action, but positions that aren't divisible by seven will result in fractional shares that are typically cashed out at market value.
MSP Recovery’s Common Stock Will Begin Trading on Split-Adjusted Basis on Tuesday, September 2, 2025
MIAMI, Aug. 28, 2025 (GLOBE NEWSWIRE) -- MSP Recovery, Inc. (NASDAQ: MSPR) (the “Company”), a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery and technology leader, announces that it will affect a reverse stock split of its Class A common stock at a reverse stock split ratio of 1-for-7, effective at 11:59 P.M. on September 1, 2025, in order to maintain compliance with the minimum
The Company’s Common Stock will continue to trade on the Nasdaq Capital Market (“Nasdaq”) under the symbol “MSPR” and will begin trading on a split-adjusted basis when the Nasdaq opens on September 2, 2025 (“Effective Time”). The new CUSIP number for the Company’s Class A common stock following the reverse split will be 553745-40-7.
The Company’s stockholders previously approved the reverse stock split and granted the Company’s board of directors the authority to determine the final reverse stock split ratio and when to proceed with the reverse stock split. The Company has filed an amendment to its Second Amended and Restated Certificate of Incorporation to affect the reverse stock split at the ratio of 1-for-7, as of the Effective Time.
As a result of the reverse split, every seven (7) shares of the Company’s issued and outstanding Common Stock will automatically be converted into one share of issued and outstanding Common Stock. The Company’s shares will begin trading on a split-adjusted basis on the Nasdaq Capital Market commencing upon market open on September 2, 2025. Immediately after the reverse split becomes effective, there will be approximately 1.02 million shares of Class A common stock issued and outstanding.
About MSP Recovery
Founded in 2014, MSP Recovery has become a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery leader, disrupting the antiquated healthcare reimbursement system with data-driven solutions to secure recoveries from responsible parties. MSP Recovery innovates technologies and provides comprehensive solutions for multiple industries including healthcare and legal. For more information, visit: msprecovery.com.
Forward Looking Statements
This release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “plan,” and “will” or, in each case, their negative, or other variations or comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance or results and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by MSP Recovery herein speaks only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for the Company to predict or identify all such events or how they may affect it. MSP Recovery has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to, the Company’s ability to capitalize on its assignment agreements and recover monies that were paid by the assignors; the inability of MSP Recovery to obtain financing and generate revenues sufficient to cover the cost of operations; the inherent uncertainty surrounding settlement negotiations and/or litigation, including with respect to both the amount and timing of any such results; the validity of the assignments of claims to MSP Recovery; the ability to successfully expand the scope of the Company’s claims or obtain new data and claims from the Company’s existing assignor base or otherwise; the Company’s ability to innovate and develop new solutions, and whether those solutions will be adopted by the Company’s existing and potential assignors; negative publicity concerning healthcare data analytics and payment accuracy; and those additional factors included in MSP Recovery’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by it with the Securities and Exchange Commission. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.
For Media Inquiries:
media@msprecovery.com
For Investor Inquiries:
investors@msprecovery.com
FAQ
What is the reverse stock split ratio announced by MSP Recovery (MSPR)?
When will MSPR's reverse stock split take effect?
Why is MSP Recovery (MSPR) implementing a reverse stock split?
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