The share price of Cosmos Health Inc. nearly tripled Friday as investors reacted to the company’s reverse stock split, but those gains vanished in after-hours trading.
The Chicago-based company announced the 1-for-25 stock split late Thursday in an effort to once again meet the Nasdaq’s $1 minimum bid price requirement, and it took effect at the open of trading Friday morning. The company also changed its name from Cosmos Holdings Inc. in Cosmos Health Inc. COSM,
although the ticker remains the same.
The stock initially tumbled on Friday before recovering for a daily gain of 178.9% to $23.01 amid record trading volume, though shares then fell more than 65% in after-hours trading, pushing shares lower than their close on Thursday on a split-adjusted basis. Regular session volume reached a record of more than 115 million shares on Friday, according to FactSet, which recorded a previous daily volume record of 16.1 million and a five-day average volume of 2.1 million on Nov. 23.
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“We are pleased to proceed with the reverse split of our stock necessary to once again meet Nasdaq’s minimum bid price requirement,” Greg Siokas, CEO of Cosmos Health, said in a statement. “Listing on the Nasdaq has been an important part of our strategy to fund our growth opportunities for the benefit of all our shareholders.”
The company was listed on the Nasdaq in February 2022.
“I am very excited about our business outlook and financial stability, and firmly believe in the future success of Cosmos and our ability to grow rapidly as a global health and wellness company with multiple strong brands,” Siokas said in the statement.
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Cosmos also filed an amended annual report with the Securities and Exchange Commission on Friday that added to the company’s material weakness warning, showing a company lacks adequate internal controls. New additions to the list of deficient controls, added in response to communications with the SEC, were “a lack of proper segregation of duties” and the lack of “multiple levels of review and oversight.”
Cosmos’ annual filing also includes a going concern warning, stating that management has “substantial doubts about the company’s ability to continue in business for a period of twelve months from the date of this filing.”
Some traders on Twitter complained that exchanges like Robinhood Markets Inc. HOOD,
and SCHW of Charles Schwab Corp.,
TD Ameritrade was unable to complete trades on the stock, leaving them unable to sell against the swell. Neither company responded to emails from MarketWatch to confirm the issues and provide a reason, though TD Ameritrade’s verified Twitter account did respond to some users to say it hadn’t yet released the new stock after the split. received.
“COSM had a reverse split today,” said a reply from TD Ameritrade. “While the shares are tradable, those awaiting delivery of their post-split COSM shares will not be able to sell the new shares until they are received. The expected delivery date is not yet known at this time.”
Shares of Cosmos Health are down 78.3% this year, outpacing the SPX of the S&P 500 index,
decrease of 19%. The stock reached a split-adjusted 52-week low of $1.69 on November 8, 2022 and a high of $111.25 on December 30, 2021.
MarketWatch staff writer Jeremy C. Owens contributed to this article.