Cosmos Health Inc.’s stock price nearly tripled Friday as investors responded to the company’s reverse stock split, but those gains disappeared in after-hours trading.
The Chicago-based company announced the 1-for-25 stock split late Thursday in an effort to regain compliance with the Nasdaq’s $1 minimum bid price requirement, and it went into effect at the open of trading Friday morning. The company also changed its name from Cosmos Holdings Inc. to Cosmos Health Inc.
though its ticker remains the same.
The stock initially plunged Friday before rallying for a 178.9% daily gain to $23.01 amid record trading volume, though shares then fell more than 65% in after-hours trading, sending shares lower than their Thursday close on a split-adjusted basis. Volume in the regular session reached a record of more than 115 million shares Friday, according to FactSet, which recorded a previous daily volume record of 16.1 million on Nov. 23 and a five-day average volume of 2.1 million.
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“We are pleased to proceed with the reverse split of our stock which is required for us to re-gain compliance with Nasdaq’s minimum bid price requirement,” Cosmos Health CEO Greg Siokas said in a statement. “Being listed on Nasdaq has been a key part of our strategy to fund our growth opportunities for the benefit of all our shareholders.”
The company uplisted on Nasdaq in February 2022.
“I am very excited about our business prospects and financial stability, and, firmly believe in the future success of Cosmos and in our ability to rapidly grow as an international 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, which discloses that a company does not have adequate internal controls. New additions to the list of inadequate controls, which were 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’s annual filing also contains a going-concern warning, which states that management has “substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of this filing.”
Some traders on Twitter complained that exchanges such as Robinhood Markets Inc.
and Charles Schwab Corp.’s
TD Ameritrade were unable to complete trades on the stock, leaving them unable to sell into the swell. Neither company responded to emails from MarketWatch seeking to confirm the issues and determine a reason, though TD Ameritrade’s verified Twitter account did respond to some users to say that it had not received the new post-split shares yet.
“COSM had a reverse split today,” one TD Ameritrade reply stated. “While the stock is tradable, those waiting on the delivery of their post-split COSM shares will not be able to sell the new shares until received. The anticipated delivery date is unknown at this time.”
Cosmos Health’s shares have fallen 78.3% this year, outpacing the S&P 500 index’s
decline of 19%. The stock hit a split-adjusted 52-week low of $1.69 on Nov. 8, 2022, and a high of $111.25 on Dec. 30, 2021.
MarketWatch staff writer Jeremy C. Owens contributed to this article.