Tilray Announces Reverse Stock Split to Maintain Nasdaq Listing

In a decisive move to secure its position on the Nasdaq exchange, Tilray's management has approved a significant reverse stock split. The announcement, made Wednesday afternoon, triggered a sharp sell-off in after-hours trading, with shares plummeting approximately 12% and falling below the psychologically significant $1.00 threshold.

The company's board has finalized a 1-for-10 reverse stock split in response to a compliance notice received from Nasdaq in March. The exchange requires listed companies to maintain a minimum bid price of $1.00 per share. This corporate action will artificially elevate the stock price well above this critical level, thereby averting a potential delisting.

Key details of the restructuring plan include:

• Substantial Share Reduction: The number of outstanding shares will be drastically reduced from a massive 1.16 billion to a more manageable 116 million.
• Effective Date: The reverse split will take effect on Monday, December 1, 2025.
• Trading Commencement: Shares will begin trading on a split-adjusted basis on the Nasdaq and the TSX starting Tuesday, December 2, 2025.
• Cash-in-Lieu for Fractions: Shareholders will receive cash payments for any fractional shares instead of the fractions themselves.

Market Reaction and Strategic Implications

The immediate market response was negative. While Tilray's stock concluded the regular trading session at $1.04, it tumbled to around $0.91 in extended trading. The financial community often interprets reverse stock splits as a signal of underlying weakness, which explains the panicked investor reaction.

Should investors sell immediately? Or is it worth buying Tilray?

Beyond mere compliance, the company's leadership is strategically aiming to regain the attention of institutional investors. Many large funds have internal policies that prohibit them from purchasing equities trading below $5.00, often categorized as "penny stocks." By achieving a higher nominal share price, Tilray hopes to re-enter the radar of these significant market players.

This move comes despite Tilray recently reporting a net profit in October, its first since 2023. However, the substantial share dilution from previous years has continued to exert downward pressure on the stock's value.

What Lies Ahead for Investors?

The coming weeks will be critical. Mathematically, the current after-hours price of $0.91 would translate to an opening price of $9.10 post-split. However, investors should proceed with caution. Stocks that undergo reverse splits frequently become targets for short-sellers anticipating further decline. The transition period is likely to be characterized by significant volatility, requiring shareholders to brace for turbulent trading conditions.