NATICK, Mass. - Allurion Technologies, Inc. (NYSE: ALUR), a company focused on obesity treatment solutions, has announced a one-for-twenty-five reverse stock split of its common stock. This corporate action will take effect at the start of trading on January 3, 2025, on the New York Stock Exchange. According to InvestingPro data, the company currently has a market capitalization of $27.38 million, with its stock showing high price volatility. The company maintains impressive gross profit margins of 73%, though it faces significant operational challenges.
The reverse stock split is intended to consolidate every twenty-five shares of issued common stock into one share, without altering the par value per share. Currently, the company has approximately 67.78 million shares outstanding, which will be reduced to roughly 2.71 million shares post-split. InvestingPro analysis reveals the company operates with a significant debt burden and is rapidly burning through cash, with a current ratio of 2.33 indicating adequate short-term liquidity. Get access to 18 additional ProTips and comprehensive financial analysis with an InvestingPro subscription.
The decision for the reverse stock split follows a notice from the NYSE, received by the company on August 12, 2024, indicating that Allurion's stock had been trading below the minimum required bid price of $1.00 over a 30-day period. The reverse stock split aims to elevate the market price of Allurion's common stock and address the deficiency regarding the NYSE's minimum price requirement.
Adjustments will also be made to the terms of Allurion's equity incentive plans, outstanding stock options, restricted stock units, convertible notes, and warrants to reflect the reverse stock split. Notably, for the company's warrants trading under the symbol "ALUR WS," each warrant will be exercisable for 0.056818 shares of common stock at an exercise price of $202.50 per share post-split.
Stockholders holding shares in book-entry form or through financial institutions will not need to take any action, as the changes will be automatically reflected in their accounts after January 3, 2025. The reverse stock split ratio was within the range authorized by the company's stockholders at the annual meeting held on December 16, 2024. The stock has experienced significant volatility with a beta of -0.61, moving contrary to broader market trends. Detailed analysis and Fair Value estimates for ALUR are available in the comprehensive Pro Research Report, one of 1,400+ company reports available on InvestingPro.
Allurion is known for its Allurion Program, which includes the Allurion Gastric Balloon, a swallowable device for weight loss, and the Allurion Virtual Care Suite. The company's gastric balloon is currently an investigational device in the United States.
This news is based on a press release statement from Allurion Technologies, Inc. and does not include any promotional content or endorsements.
In other recent news, Allurion Technologies has seen a series of significant developments. The company reported third-quarter 2024 revenue at $5.4 million, a decrease from the previous year. Consequently, Allurion revised its full-year 2024 revenue guidance to fall between $30 million and $35 million. Despite these financial challenges, the company maintains a gross profit margin of 73%.
Allurion's shareholders recently approved key proposals, including the re-election of three Class I directors and a reverse stock split. They also ratified the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for the current fiscal year.
On the analyst front, TD Cowen maintains a Buy rating for Allurion, recognizing the company's strategic plan to improve commercial performance and significantly cut operating costs. However, Chardan Capital Markets downgraded Allurion's stock from Buy to Neutral, citing a pattern of underwhelming business performance.
Allurion is also planning substantial operational changes, including reducing its operating expenses by half and reducing its workforce by 50% by 2025. The company's Virtual Care Suite is gaining traction, which is expected to contribute to future revenue growth. These recent developments are expected to shape the company's future direction.
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