60 Degrees Pharma: Reverse Split Catalyst Sets Up a Tactical Trade

The immediate catalyst is a straightforward compliance move. 60 Degrees Pharma will implement a one-for-four reverse stock split effective January 20, 2026. The mechanics are clear: it will reduce the number of outstanding shares from approximately 5,148,767 to approximately 1,287,192. The split does not alter the company's financial health, authorized share count, or par value. It is a defensive maneuver, explicitly intended to bring 60 Degrees Pharma into compliance with the minimum bid price requirement for its Nasdaq listing.

This creates a tactical mispricing opportunity. The reverse split itself is a technical adjustment, not a business development. Yet, such events often trigger short-term volatility as traders react to the headline and the new, higher share price. The setup is classic for an event-driven trade: a clear catalyst with a defined date, leading to a potential temporary disconnect between the stock's new price and its underlying fundamentals.

The path to sustainability, however, remains fragile. The need for a reverse split to maintain a listing is a red flag, signaling the stock has struggled to meet market requirements. As noted in a summary, the company's own press release suggests "substantial doubt" about the company's ability to continue on a going-concern basis. The tactical trade hinges on the event's immediate impact, not the long-term resolution of these deeper operational challenges.

Immediate Reaction & Technical Setup

The market's verdict on the reverse split catalyst is clear: it's being viewed as a negative signal. Shares plunged 9.6% today to close at $0.477. This sharp decline suggests investors are interpreting the move not as a neutral compliance step, but as a direct admission of listing jeopardy. The price action underscores the tactical trade's risk: the catalyst is amplifying existing concerns about the company's viability.

Technically, the setup is defined by a critical threshold. The reverse split will take effect on January 20th, and the new, higher share price must sustain above the Nasdaq's $1.00 minimum bid price requirement to avoid another compliance notice. The immediate trigger for a potential short-term reversal is a break above the recent low of $0.34. A move decisively above that level would signal a pause in the selling pressure.

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Conversely, a break below that low would confirm further weakness and likely trigger another wave of selling. The stock's intraday range today, from a high of $0.55 to a low of $0.34, shows significant volatility and a clear downward bias. For a tactical trader, the path of least resistance appears to be down until the post-split price stabilizes above $1.00.

Financial Reality: Growth vs. Losses

The operational story is one of stark contrast. On one hand, there is clear growth: Q3 2025 net product revenue increased 223% year-over-year to $438 thousand, driven by ARAKODA® deliveries. On the other, the bottom line shows severe pressure, with the company posting a gross loss of approximately $100 thousand and a net loss of approximately $2.44 million for the quarter. The growth is real, but it is being overwhelmed by costs, including a one-time inventory write-off and rising operating expenses.

This pattern of growth outpacing profitability is not new. It is a key reason the stock has been in trouble. The company regained compliance with Nasdaq's minimum bid price requirement just last August, after a delisting notice in February 2024. The reverse split now is a direct response to the same fundamental issue: the stock price has been too low for too long. The tactical trade must weigh this growth against the persistent financial losses and the history of listing troubles.

The bottom line is that the current valuation does not reflect the growth story. Instead, it prices in the high risk of another compliance failure. The reverse split is a technical fix for a price problem, not a solution to the underlying business deficit. For a tactical investor, the event creates a window, but the financial reality suggests the window is narrow.

Trade Setup & Key Levels to Watch

The tactical trade hinges on the event's immediate aftermath. The reverse split creates a clear, short-term opportunity if the stock stabilizes above a key psychological and technical level. The immediate setup is for a bounce if shares hold above $0.50. This level is critical because it would signal a pause in the selling pressure triggered by the negative compliance headline. A decisive break above that mark, perhaps on the post-split price, could spark a short-term rally as traders reassess the technical adjustment.

However, the fundamental path to a sustainable price above $1.00 remains highly uncertain. The core operational risk is the company's ability to generate positive cash flow from ARAKODA® sales to fund its operations and R&D. While Q3 revenue showed strong growth, the company posted a gross loss of approximately $100 thousand and a net loss of $2.44 million. The recent inventory write-off and rising expenses highlight the pressure on margins. The company's cash position, while improved to $4.1 million, is being depleted by these losses.

The next near-term catalysts will be operational updates. Investors should watch for the Q4 2025 results and any news on the new four-year shelf-life inventory entering the supply chain in early 2026. This inventory is crucial; it aims to resolve the supply chain issues that caused the recent write-off and could improve future gross margins. Positive updates here could provide a fundamental catalyst to support the stock.

The bottom line is a trade between a technical bounce and a fundamental reset. The reverse split creates a tactical mispricing window, but the stock's ability to climb above $1.00 depends entirely on the company's financial trajectory. For now, the setup is defined by the split's mechanics and the immediate price action, not the long-term resolution of the cash flow problem.