REE Automotive at a Crossroads: Technical and Financial Moves to Save Its Nasdaq Listing

The clock is ticking for REE Automotive (NASDAQ: REE). On July 3, 2025, Nasdaq issued a compliance warning: the company's shares had closed below $1.00 for 30 consecutive days, triggering a 180-day deadline to regain compliance. With just six months to climb back above the threshold, REE faces a high-stakes balancing act between technical market dynamics and operational execution. This article examines whether a reverse stock split, liquidity management, or strategic pivots can avert delisting—and whether the stock's fate signals long-term viability or a strategic misstep.

The Nasdaq Compliance Clock Ticking

REE's shares began 2025 at $1.22 but plummeted to $0.68 by mid-June, trading at a market cap of just $18.7 million—a 92% year-to-date decline. The Nasdaq notice is a stark warning: failure to reach $1.00 for ten consecutive days by December 29, 2025, risks delisting, which could trigger a liquidity spiral and investor exits.

A reverse stock split—shrinking shares to boost the price—is a common tactic, but it carries risks. While it might temporarily lift REE's stock above $1, it could also signal desperation to investors, further eroding trust. The company's cash reserves ($72.3 million as of 2024) provide a 12-month runway, but a cash burn rate of $9.3 million monthly means time is fleeting.

Technical Analysis: Bearish Momentum and Liquidity Constraints

Technical indicators paint a grim picture. As of June 2025, REE's RSI (Relative Strength Index) had dipped into oversold territory (below 30) but faced resistance at $0.87, the 50-day moving average. The MACD (Moving Average Convergence Divergence) remains negative, while the weekly Bollinger Bands confirm a falling trend.

Low trading volume exacerbates risks. June's average daily volume was just 346,000 shares—far below the May 15 spike of 7 million shares. Thin liquidity heightens volatility; on June 27, the stock swung 10% in a single day. A “Technical Sentiment Signal: Sell” underscores investor pessimism, with resistance at $0.87 and support near $0.59.

Financial Health and Operational Challenges

REE's financials amplify concerns. A $111.8 million net loss in 2024 and a burn rate of $9.3 million/month underscore the urgency to achieve cash flow positivity by late 2025. While $1 billion in customer reservations for its electric trucks and platforms offer hope, converting reservations into revenue depends on resolving production bottlenecks.

Strategic shifts, like pivoting to software commercialization, aim to reduce hardware dependency. Partnerships with Motherson and Roush Industries may improve supply chain efficiency, but delays in P7 production—linked to tariff issues—threaten timelines. Analysts at H.C. Wainwright and Roth/MKM have downgraded the stock to “Neutral,” citing liquidity risks and execution doubts.

Strategic Crossroads: Reverse Split or Strategic Failure?

A reverse split could temporarily lift the stock, but it risks alienating shareholders and signaling a lack of organic growth strategies. Alternatives include raising capital via equity or debt—a move that could dilute existing investors or worsen debt ratios.

The software pivot is critical. REE's “software-defined vehicle” (SDV) platform, offering modular by-wire systems, has long-term potential. However, competitors like Rivian and Tesla are accelerating in the EV space, and REE's valuation hinges on proving its tech's scalability.

Investment Considerations

• Hold: Only for investors who believe in a short-term bounce from a reverse split or production milestones. Monitor the $0.87 resistance level and cash burn updates.
• Sell: The bearish technicals, thin liquidity, and execution risks make REE a high-risk bet. A delisting could trigger a collapse in trading volume.
• Capitalizing on Volatility: Short sellers might target the stock, betting on a continued decline toward $0.50–$0.60.

Conclusion: A Critical Inflection Point

REE Automotive sits at a pivotal juncture. The Nasdaq deadline is a forcing function, but the real test is whether its financial turnaround and strategic pivots can align with market demands. While a reverse split might delay the inevitable, the company's survival hinges on addressing cash flow, production delays, and investor skepticism. For now, the technical and fundamental indicators lean bearish, making selling or shorting prudent unless a clear catalyst emerges.

The next six months will reveal whether REE's gamble pays off—or if this is the start of a long exit from the public markets.

Final recommendation: Exercise caution. REE's stock is a high-risk trade with limited upside unless operational milestones materialize.