Orion Energy Systems to Enact Reverse Stock Split to Regain Nasdaq Compliance

Orion Energy Systems will implement a 1-for-10 reverse stock split to regain Nasdaq compliance. The move aims to boost the company's share price above Nasdaq's $1.00 minimum bid threshold. The split will reduce issued and outstanding shares from 35.2 million to 3.5 million, while authorized shares will fall from 200 million to 20 million. Shareholder ownership percentages will remain unchanged except for fractional shares, which will be paid out in cash. The split is expected to be effective on August 22, 2025.

Orion Energy Systems, Inc. (OESX) has announced a significant move to regain Nasdaq compliance by implementing a 1-for-10 reverse stock split. Effective at 12:01 a.m. CT on August 22, 2025, the reverse split aims to boost the company's share price above the Nasdaq's $1.00 minimum bid threshold. This strategic maneuver will reduce the number of issued and outstanding shares from approximately 35.2 million to 3.5 million, while authorized shares will decrease from 200 million to 20 million [1].

The reverse stock split is designed to attract institutional investors who typically avoid penny stocks and to reduce the stigma associated with being classified as a "micro-cap" stock. This move is particularly important for Orion Energy Systems, which has faced a 26% decline in its stock price over the past six months and reported a negative EBITDA of $5.22 million in the last twelve months [3]. The company has also filed an amendment with the Wisconsin Department of Financial Institutions to effect the reverse stock split [1].

Shareholder ownership percentages will remain unchanged except for fractional shares, which will be paid out in cash. All outstanding equity awards and securities convertible into common stock will be adjusted proportionally. Equiniti Trust Company will manage the exchange process, automatically crediting accounts for shares held in street name or book-entry form and providing instructions for holders of physical certificates [1].

The immediate market reaction to the split was muted, with the stock closing at $0.6202 on August 18, 2025, with a market capitalization of $21.83 million. Analysts have assigned a "Hold" rating with a $0.50 price target, reflecting skepticism about Orion's ability to sustain growth [2].

Orion Energy Systems' pivot toward electric vehicle (EV) infrastructure and its alignment with federal electrification initiatives suggest that this reverse split could be a catalyst for renewed investor interest—if executed alongside substantive operational improvements. The company's Voltrek division, which provides EV charging solutions, has secured contracts with Boston Public Schools and MassDOT, leveraging federal funding under the National Electric Vehicle Infrastructure (NEVI) Act [2].

However, the success of the reverse split hinges on Orion's ability to address its underlying financial vulnerabilities and demonstrate financial discipline. Investors must assess whether the company can transition from a niche player to a scalable infrastructure provider and compete with established players like ChargePoint and Plug-in America [2].

For investors, the reverse stock split presents a binary scenario. It mitigates the risk of delisting and improves the stock's tradability. However, it also exposes the company's fragility. A prudent approach would involve monitoring EBITDA trends, tracking contract wins, and benchmarking Orion's performance against peers [2].

Orion Energy Systems' reverse stock split is a defensive maneuver with limited upside. While it addresses immediate regulatory concerns, the company's long-term prospects depend on its ability to execute its EV infrastructure strategy and demonstrate financial discipline. For investors, the split is a signal to remain cautiously optimistic but to prioritize fundamentals over short-term price movements.

References:
[1] https://www.nasdaq.com/articles/orion-energy-implement-1-10-reverse-stock-split-regain-nasdaq-compliance
[2] https://www.ainvest.com/news/orion-energy-systems-1-10-reverse-stock-split-calculated-move-reclaim-credibility-fractured-clean-energy-market-2508/
[3] https://www.investing.com/news/company-news/orion-energy-systems-to-implement-1for10-reverse-stock-split-93CH-4200782