SAN JOSE, Calif. - Outset Medical, Inc. (NASDAQ:OM), a medical technology company currently trading at $0.58 per share with a market capitalization of $31 million, has announced a reverse stock split of its common stock at a ratio of one-for-fifteen, set to take effect at the start of trading on March 20, 2025. The action, approved by stockholders on March 5, aims to reclassify every 15 shares of the company’s pre-split common stock into one new share, reducing the number of shares from approximately 265 million to about 17 million. According to InvestingPro data, the stock has experienced significant volatility, with a year-to-date decline of nearly 48%.
The reverse stock split will be implemented on the Nasdaq Global Select Market under the existing ticker symbol OM, with a new CUSIP number 690145206. This corporate move is designed to affect all shareholders uniformly and will not change their percentage ownership in the company, except for adjustments due to fractional shares, which will be compensated with cash payments. While the company maintains strong liquidity with a current ratio of 5.69, InvestingPro analysis reveals challenging operational metrics, including negative EBITDA of $102 million on revenue of $114 million in the last twelve months.
Outset Medical’s board of directors determined the final ratio for the reverse stock split, which will not alter the number of authorized shares or the par value per share. The reverse stock split is also set to proportionately adjust the number of shares available for issuance under the company’s equity incentive plans, as well as the exercise prices of outstanding stock options.
Equiniti Trust Company, LLC is managing the reverse stock split as the transfer agent. They will issue post-split shares in book-entry form and maintain them in accounts for each stockholder, requiring no action from registered stockholders holding pre-split shares. Those owning shares through brokers or other nominees will also see their holdings automatically adjusted.
The reverse stock split is detailed in Outset Medical’s definitive proxy statement filed with the Securities and Exchange Commission on February 4, 2025, available on the SEC’s website and the company’s site. For investors seeking deeper insights, InvestingPro offers comprehensive analysis through its Pro Research Report, including detailed financial health scores and 12 additional ProTips that could help inform investment decisions in this volatile healthcare technology sector.
Outset Medical is known for its Tablo® Hemodialysis System, a technology designed to simplify and reduce the cost of dialysis treatment. This press release also contains forward-looking statements about the potential effects of the reverse stock split on the company’s stock and its future performance. However, these statements are subject to risks, uncertainties, and changes that could cause actual results to differ materially from expectations. The information is based on a press release statement.
In other recent news, Outset Medical reported its Q4 2024 earnings, surpassing expectations with an earnings per share (EPS) of -$0.37, better than the forecasted -$0.43. The company’s revenue for the quarter was $29.5 million, slightly exceeding projections. This performance was marked by a 3% sequential revenue growth, despite a 3% year-over-year decline. Additionally, Outset Medical’s gross margin improved by 119 basis points sequentially, reaching 37.6%. The company also reported a net loss of $19.3 million, which is a 35% reduction from Q4 2023. In other developments, Outset Medical filed a Certificate of Correction to amend a clerical error in its preferred stock documentation. The correction involved the conversion of 842,753 shares of Series A Preferred Stock into 210,688,250 shares of common stock, significantly increasing the number of common shares in circulation. This adjustment followed stockholder approval at a special meeting. These recent developments reflect Outset Medical’s ongoing efforts to improve operational efficiency and financial performance.
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