MSP Recovery Approves Reverse Stock Split Amendment Amid Financial Challenges

MSP Recovery (MSPR) has approved a reverse stock split amendment with a ratio between 1-for-2 and 1-for-7, and the issuance of Class A Common Stock to Virage Recovery Master LP. The move aims to comply with Nasdaq Listing Rule 5635(d). Despite a legal victory, MSPR faces significant financial challenges with negative earnings and cash flow issues. The technical outlook is bearish, impacting the overall assessment.

MSP Recovery, Inc. (NASDAQ: MSPR), a company facing significant financial challenges, has taken steps to address its financial situation. At a special meeting held on July 2, 2025, shareholders approved two key proposals. The first proposal authorizes a reverse stock split of the company’s common stock, with a ratio set between 1-for-2 and 1-for-7, as determined by the board of directors. The second proposal allows for the issuance of Class A common stock to Virage Recovery Master LP to comply with Nasdaq Listing Rule 5635(d) [1].

The reverse stock split aims to increase the price per share, potentially attracting investors and stabilizing the stock's value. The issuance of Class A common stock to Virage Recovery Master LP is part of the company's efforts to meet Nasdaq listing requirements [2].

Despite these moves, MSP Recovery continues to face substantial financial challenges. The company's stock has declined nearly 90% over the past year, currently trading at $0.53. The company's health score, as per InvestingPro data, is 1.32 out of 5, indicating significant financial strain. Additionally, the company's cash burn rates are concerning, suggesting ongoing financial difficulties [1].

The technical outlook for MSP Recovery remains bearish, with negative earnings and cash flow issues impacting the overall assessment of the company's financial health. Investors should closely monitor these developments and assess the impact on the company's future prospects.

References:
[1] https://www.investing.com/news/sec-filings/msp-recovery-shareholders-approve-reverse-stock-split-and-stock-issuance-93CH-4198491
[2] https://www.morningstar.com/news/business-wire/20250815368408/scholar-rock-reports-new-employee-inducement-grants-under-nasdaq-listing-rule-5635c4