Synthetic Biologics

About Synthetic Biologics

Synthetic Biologics reverse split its stock 1 for 20 in 2020 to avoid NASDAQ delisting. The biotech company had seen its stock fall below 1. Reverse splits are common among struggling biotechs. Unlike bankruptcies, reverse splits do not eliminate debt or restructure operations. They simply reduce the number of shares outstanding to boost the per share price. Most companies that do reverse splits continue to decline. A study by S&P Dow Jones Indices found that approximately 30 percent of reverse split companies are delisted within five years. Synthetic Biologics continued operating after the split but remained a penny stock. The case illustrates how reverse splits can be a sign of distress rather than recovery.