Why Did Oriental Rise Plunge 11.96% After Reverse Split?

On July 25, 2025, Oriental Rise experienced a significant drop of 11.96% in pre-market trading, reflecting a notable shift in investor sentiment and market dynamics.

Oriental Rise Holdings Limited recently filed a prospectus, which included a 1-for-10 reverse stock split. This move is aimed at consolidating the company's capital structure and meeting Nasdaq's continued-listing requirements. The reverse split, effective from July 24, 2025, will reduce the number of outstanding shares from approximately 92.5 million to 9.25 million, with fractional shares being cashed out. This action is intended to lift the per-share price above the minimum bid requirement, potentially enhancing per-share metrics and attracting institutional investors.

However, the reverse split can also signal financial weakness, potentially dampening investor sentiment. The reduction in the number of outstanding shares may lead to decreased liquidity, which could widen bid-ask spreads and increase volatility. While the move does not alter the total equity value, it may be perceived as a reactive measure to declining stock performance, which could deter some investors.