Erayak Power (RAYA) Plummets 28% on Reverse Stock Split and Delisting Alert: Is This a Desperation Play or a Strategic Move?

Summary
• Erayak Power (RAYA) trades at $0.051, down 28.27% from its $0.0711 previous close
• Company announces 220-for-1 reverse stock split effective September 30, 2025
• Nasdaq delisting notice received due to bid price non-compliance
• Intraday range of $0.048–$0.0537 highlights volatile session

Erayak Power’s stock has plunged amid a high-stakes corporate maneuver to avoid Nasdaq delisting. The 220-for-1 reverse stock split, coupled with a delisting notice, has triggered a sharp selloff. With the stock trading near its 52-week low of $0.0345, investors are weighing the company’s survival strategy against its deteriorating fundamentals.

Reverse Stock Split and Delisting Threat Spark Panic Sell-Off
Erayak Power’s 28.27% intraday drop stems from a dual crisis: a 220-for-1 reverse stock split to meet Nasdaq’s minimum bid price requirements and a delisting notice due to sustained sub-$0.10 bid prices. The reverse split, reducing outstanding shares from 187.9 million to 854,059, signals desperation to avoid delisting rather than strength. The delisting notice, issued September 3, 2025, accelerates the timeline for compliance, forcing traders to liquidate positions as the stock’s liquidity dries up. The move reflects deteriorating investor confidence and operational challenges, with the stock now trading near its 52-week low.

Technical Deterioration and ETF Correlation: A Bearish Playbook
• 200-day MA: $1.19 (far above current price)
• RSI: 67.7 (overbought but bearish divergence)
• MACD: -0.0626 (negative momentum)
• Bollinger Bands: Price at lower band ($0.0297), indicating oversold conditions

The technical picture for RAYA is dire. The stock is trading 92% below its 200-day MA, with RSI and MACD confirming bearish momentum. Bollinger Bands suggest extreme volatility, while the 52-week range ($0.0345–$3.35) underscores the stock’s collapse. No leveraged ETFs are available for direct correlation, but the broader electrical equipment sector’s mixed performance (e.g., Emerson Electric’s -1.3% intraday drop) hints at sector-wide caution. With no options data provided, short-term traders should focus on tight stop-losses near $0.048 and consider cash-secured puts for downside exposure.

Backtest Erayak Power Stock Performance
Key findings• Sample size is small (3 plunges ≥ –28 % from 2022-01-01 to 2025-09-24). • After each shock the stock continued to erode: the average cumulative return reached –73 % 30 trading days later, with no single instance recovering to breakeven during the observation window. • All time-horizon t-tests indicate the post-event drift is significantly negative (at the 5 % level) from day 3 onward. • The behaviour suggests that very deep one-day sell-offs in RAYA are not followed by a mean-reversion bounce but rather by continued capitulation.How to read the detailsOpen the interactive “Event Backtest” panel below. It contains • the three plunge dates, • full performance curves and statistics for each holding horizon, and • downloadable raw data.Auto-chosen parameters1. Price series: close price (default for event studies). 2. Holding window: 30 trading days (engine default; adequate for short-term drift assessment). 3. Benchmark: equal-period buy-and-hold in the same ticker (implicit engine setting).If you need a different benchmark or a longer window, just let me know.Feel free to explore the panel and let me know if you’d like any refinements or a strategy simulation on top of these signals.

Critical Crossroads: Will RAYA’s Reverse Split Save It or Signal the End?
Erayak Power’s reverse stock split is a high-risk, high-reward gambit to avoid delisting, but the stock’s technical and fundamental deterioration suggests limited upside. Traders should monitor the September 10, 2025, hearing request deadline and the reverse split’s execution on September 30. The stock’s 92% discount to its 200-day MA and 96% YTD decline indicate a prolonged bearish trend. For context, sector leader Emerson Electric (EMR) fell 1.3% intraday, signaling broader caution. Investors should prioritize risk management, with a focus on liquidity and regulatory outcomes. Watch for a breakdown below $0.048 or a regulatory lifeline to dictate next steps.