Nakamoto Sets 1-for-40 Reverse Split to Meet Nasdaq $1 Bid Rule
Bitcoin treasury firm Nakamoto will implement a 1-for-40 reverse stock split effective May 22 to restore compliance with Nasdaq's $1 minimum bid price. The split cuts outstanding shares from about 696.1 million to 17.4 million as the stock trades near $0.16, more than 99% below its 52-week high.
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The Split and the Nasdaq Deadline
Nakamoto (NAKA) will carry out a 1-for-40 reverse stock split effective Friday, May 22, after stockholders approved a split ratio within a range of 1-for-20 to 1-for-50 at a May 8 special meeting. According to the company's announcement, outstanding common shares will fall from 696.1 million to 17.4 million.
The split responds to a Nasdaq notice issued December 10 stating that the stock had traded below the $1 minimum bid requirement for 30 consecutive business days. Per a filing with the U.S. Securities and Exchange Commission, Nakamoto has until June 8 to regain compliance by keeping its share price above $1 for at least 10 straight trading sessions.
Share Price and Earnings Pressure
Shares closed at $0.16 on Wednesday, down 7.5% on the day according to Google Finance data, after touching an intraday low of $0.145. Decrypt reported the intraday low and an after-hours gain of 2.6%, while the closing figure is consistent across both reports. The stock is down more than 99% from its 52-week high of $34.77 and has lost more than 99% of its value since May 2025, when the company announced its Bitcoin treasury strategy and merger with healthcare provider KindlyMD.
Nakamoto reported a first-quarter net loss of $238.8 million, against a $1 million loss a year earlier. Filings attribute $102.5 million of the loss to a mark-to-market decline tied to Bitcoin's fall from $87,519 at the end of 2025 to $68,220 on March 31. A further $107.7 million came from a non-cash reduction linked to a pre-acquisition call option, and transaction and integration costs added roughly $8 million.
Treasury Holdings and Operations
The company held more than 5,000 Bitcoin at quarter-end, with an aggregate fair value of about $345 million at March 31 prices. Decrypt, reporting on Bitcoin's later price, put the holding at more than $388 million. Both outlets describe the treasury as having been drawn down. Nakamoto sold roughly 284 BTC during the quarter for working capital and generated about 43 BTC in premium income from its derivatives strategy, after which it sold about 40 BTC. Decrypt reports the company sold around $20 million of BTC in Q4 and about $22 million in Q1.
Q1 operating revenue was $2.7 million, following the February 20 acquisitions of BTC Inc. and UTXO Management, which added media, advisory and asset management operations. The newly acquired businesses contributed for only part of the quarter. Chief executive David Bailey described the quarter as transformational as the company repositioned itself as a Bitcoin operating business.
Sector Context
Nakamoto is one of several Bitcoin treasury companies under pressure. A Standard Chartered report published last September found many crypto treasury firms trading below the value of the digital assets on their balance sheets. Strategy and Metaplanet have continued accumulating Bitcoin, while smaller treasury firms have slowed purchases or sold holdings to cover expenses and debt. Genius Group liquidated its entire 84 BTC treasury in February to repay debt. BitcoinTreasuries.Net ranks Nakamoto as the 20th largest corporate Bitcoin holder, with 5,058 BTC.
Why It Matters
For Traders
A reverse split reduces share count but not market value, so a sub-$1 stock's price action after May 22 will be the key signal to watch against the June 8 compliance deadline.
For Investors
Repeated treasury sales and a 99% drawdown suggest the equity trades mainly on operating execution rather than Bitcoin exposure alone, a pattern across the sector.
For Builders
Treasury firms that sell holdings to fund operations create on-chain supply that does not follow buy-side accumulation, which is relevant to anyone modeling corporate BTC demand.
This article is for information only and is not financial advice. Read the full disclaimer.
