Why Did Stem Plunge 15.56%? Reverse Split Announced

On June 12, 2025, Stem's stock price plummeted by 15.56% in pre-market trading, marking a significant decline for the company.

Stem, Inc. has announced a 1-for-20 reverse stock split, effective from June 23, 2025. This move is aimed at regaining compliance with the New York Stock Exchange's minimum average closing price requirement. The reverse stock split will reduce the number of issued and outstanding shares from approximately 167 million to 8.4 million, while the number of authorized shares will be cut from 500 million to 250 million. This decision was approved by the company's stockholders during the Annual Meeting of Stockholders held on June 4, 2025, with the final split ratio determined by the Board of Directors on June 9, 2025.

The reverse stock split will not alter any stockholder's percentage interest in equity, except in cases where a stockholder would otherwise be entitled to a fractional share. In such instances, a cash payment will be made in lieu of the fractional share. This strategic move by Stem is expected to help the company meet the NYSE's listing requirements and stabilize its stock price in the long run.