Online car marketplace Cazoo has confirmed it will be conducting a reverse stock split and expansion of its authorised share capital.
Its board of directors have signed off for Cazoo to carry out a 1-for-20 reverse stock split at a value of $0.0001 per share. The decision for a reverse stock split was first announced in the company’s Q2 2022 financial results.
Companies conduct a stock split when they wish to share liquidity by dividing existing shares into smaller ones. The opposite occurs in a reverse stock split, where shares are consolidated into smaller amounts.
Following the reverse stock split, will give the London business a share capital of $435,500, consisting of 165,000,000 Class A ordinary shares, 2,500,000 Class B ordinary shares, 50,000,000 Class C ordinary shares and 250,000 preference shares all valued at $0.002.
London-based Cazoo is listed on the New York Stock Exchange but has previously failed to meet the minimum standards of a $1.00 closing price for 30 consecutive trading days.
In January Cazoo’s founder, Alex Chesterman announced he would be stepping down as CEO as the firm missed targets in its results and revealed a “revised 2023 plan”.
Speaking on the Q4 results, Chesterman said: “Our new 2023 plan, which includes more modest top-line ambitions, ensures that we continue to improve our unit economics, reduces our fixed costs and conserves cash as we make continued progress towards our goal of reaching profitability, without the need to raise further funding over the next 18-24 months.”
Cazoo’s results show £1.25bn in UK revenue for 2022. However, its fourth-quarter revenue declined from £347m in Q3 to £315m in Q4.
Last year Cazoo announced that it was withdrawing all operations from Europe.