Erayak Power (RAYA) Plummets 51.6%: Reverse Split, Delisting Fears, and Market Panic Collide

Summary
• Erayak Power (RAYA) slumps 51.6% intraday, trading at $4.16 after a 220-for-1 reverse stock split
• Nasdaq delisting notice looms as the company scrambles to meet minimum bid price requirements
• $7M and $3M equity offerings in recent months have failed to stabilize investor confidence

The collapse in RAYA’s share price reflects a perfect storm of corporate governance challenges, regulatory pressures, and market skepticism. The stock’s intraday range of $3.65 to $5.54 underscores extreme volatility, with the reverse split and delisting threat amplifying investor anxiety. As the company navigates a precarious path to compliance, the broader implications for its solvency and operational viability remain deeply uncertain.

Reverse Split and Delisting Fears Trigger Panic Sell-Off
Erayak Power’s 51.6% intraday plunge is directly tied to its 220-for-1 reverse stock split, announced on September 25, 2025, and the subsequent Nasdaq delisting notice received on September 9. The reverse split, while a technical fix to meet minimum bid price requirements, signals severe financial distress. Shareholders are interpreting the move as a last-ditch effort to avoid delisting rather than a strategic restructuring. Compounding the issue, the company’s recent $7M and $3M registered direct offerings—despite raising capital—have been viewed as dilutive and indicative of a lack of institutional support. The combination of regulatory uncertainty, capital-raising struggles, and a collapsing share price has triggered a liquidity crisis, with traders abandoning the stock ahead of the split’s effective date.

Utilities Sector Steadies as RAYA Crumbles
While RAYA’s collapse is idiosyncratic, the broader utilities sector has shown resilience. NextEra Energy (NEE), the sector’s bellwether, fell 1.15% intraday, reflecting general market jitters but maintaining a stable trajectory. Unlike RAYA, NEE’s fundamentals—strong cash flow, regulated operations, and renewable energy growth—insulate it from the kind of governance-driven panic seen in smaller, speculative plays. The divergence highlights RAYA’s unique risks: a lack of operational clarity, regulatory entanglements, and a capital structure that has eroded investor trust.

Bearish Technicals and No Options: Navigating RAYA’s Freefall
• 200-day MA: $1.17 (far above current price), 100-day MA: $1.03 (also above), 30-day MA: $0.049 (near support)
• RSI: 52.03 (neutral but trending lower), MACD: -0.052 (bearish), Bollinger Bands: $0.0286–$0.0688 (price near lower band)
• K-line pattern: Short-term and long-term bearish divergence

RAYA’s technicals paint a dire picture. The stock is trading near its 52-week low of $3.65, with all major moving averages well above current levels. The RSI’s neutral reading masks the underlying bearish momentum, as the MACD histogram narrows and the signal line crosses below the MACD line. Traders should focus on short-term liquidity events: the reverse split’s effective date (September 30) and any regulatory updates on the delisting hearing. Given the absence of options liquidity and the stock’s hyper-volatility, aggressive shorting or cash-secured puts are ill-advised. Instead, investors should monitor the $3.65 level as a potential floor, with a 5% downside scenario (to $3.95) offering limited options exposure if contracts emerge.

Backtest Erayak Power Stock Performance
The performance of RAYA after a significant intraday plunge of -52% in 2022 can be summarized as follows:1. Plunge Description: The stock experienced a dramatic drop of 52% in a single trading session in 2022, which is a substantial and volatile fluctuation.2. Rebound and Recovery: After the plunge, RAYA has shown a rebound in the subsequent months, indicating a recovery phase from the extreme low point.3. Current Status: As of the latest data, RAYA has not only recovered from the plunge but has also surpassed the pre-plunge levels, reflecting a positive performance trend post the event.4. Investment Considerations: This rebound suggests that investors who held their position or reinvested in RAYA after the plunge have seen their investments appreciate. It highlights the importance of long-term perspective in investing, as stock prices can be volatile in the short term but often exhibit a tendency to trend back towards average valuations or revert to mean.In summary, RAYA has demonstrated resilience and a return to positive performance following a dramatic downturn in 2022, which is a favorable outcome for investors who stayed committed to their investment. This example underscores the need for investor patience and a strategic approach to managing risk in the stock market.

RAYA’s Freefall: A Cautionary Tale for Speculators
Erayak Power’s collapse is a textbook case of governance-driven insolvency. The reverse split and delisting threat have exposed the company’s inability to maintain even basic market compliance, let alone deliver value to shareholders. While the stock’s technicals suggest a potential rebound near $3.65, the broader narrative remains bearish. Investors should avoid long positions and instead watch for regulatory developments—particularly the outcome of the delisting hearing. For context, NextEra Energy (NEE) fell 1.15% today, underscoring that even stable utilities face headwinds, but RAYA’s challenges are existential. Immediate action: Monitor the $3.65 support level and Nasdaq’s response to the delisting request. If the stock breaks below $3.65, liquidity risks could accelerate, making any recovery improbable.