VisionSys Inc. (VSA) Plunges 13.22% as Reverse Split Triggers Worst Selloff Since Dec. 18 Restructuring

VisionSys Inc. (NASDAQ: VSA) fell to its lowest level so far this month on Dec. 19, with an intraday drop of 10.00%. The stock has now declined 13.22% over two trading days, marking its most significant selloff since the 1-for-50 reverse stock split announced on Dec. 18. The move, set to take effect on Dec. 22, consolidates 27.7 billion outstanding shares into 554.4 million, aiming to stabilize the company’s equity structure amid deteriorating financial metrics.

The reverse split, intended to address concerns over low share price and regulatory compliance, triggered immediate skepticism. The stock closed at a 12-month low, reflecting investor concerns over the company’s ability to reverse its financial trajectory. VisionSys reported a 3-year revenue decline of 1.5%, with a net margin of -69.67% and an operating margin of -61.64%. Its Altman Z-Score of -67.77 places it in a high-risk “distress zone,” while a P/S ratio of 0.01 underscores extreme pessimism. The company’s minimal institutional ownership (0.32%) and lack of insider activity further highlight waning confidence.

Operating in the volatile AI and biotech sectors, VisionSys faces execution risks despite its focus on brain-machine interaction and AI-powered healthcare solutions. A Piotroski F-Score of 3 and a Beneish M-Score of 98.15 raise concerns about operational transparency and governance. The stock’s beta of 3.11 amplifies its sensitivity to market swings, compounding volatility. Technical indicators, including an RSI of 22.59, suggest the stock was already oversold before the split announcement, which investors interpreted as a desperate measure rather than a sustainable strategy.

The reverse split may temporarily address Nasdaq listing requirements but does not resolve underlying challenges. Fractional share aggregation by Citibank could create liquidity issues for smaller investors, while the company’s debt-to-equity ratio of -0.09 signals severe financial instability. Without meaningful revenue growth or margin improvements, VisionSys’s ability to attract institutional interest remains questionable. The coming months will test whether this restructuring effort can stabilize the stock or if further declines loom as confidence in its long-term viability erodes.