Anghami, the Abu Dhabi-headquartered music streaming giant and the first Arab tech company to list on the Nasdaq, has announced plans for a reverse stock split. This strategic move is aimed at regaining compliance with the Nasdaq’s minimum bid price requirement and avoiding a potential delisting from the US stock exchange.
The Nasdaq Compliance Challenge
The company received a formal notification from the Nasdaq Stock Market indicating that its share price had traded below the required minimum of $1.00 for more than 30 consecutive business days. According to exchange rules, Anghami has been given a grace period until January 6, 2025, to bring its stock price back above the $1.00 threshold for at least 10 consecutive business days to maintain its listing.
The Proposed Solution: A Reverse Stock Split
To address the compliance issue, Anghami’s board is proposing a reverse stock split, which consolidates the number of existing shares into fewer, proportionally higher-priced shares. The company will seek shareholder approval at an upcoming extraordinary general meeting (EGM) for a split ratio ranging from 1-for-2 to 1-for-10. A reverse split is a technical maneuver that does not alter a company’s overall market capitalization but is a common tool used by public companies to increase their per-share trading price.
Context of a Post-SPAC Market
Anghami made headlines in February 2022 with its landmark debut on the Nasdaq via a merger with a special purpose acquisition company (SPAC). However, like many technology companies that went public during the SPAC boom of 2021-2022, it has faced significant market headwinds and a challenging macroeconomic environment that has impacted its stock performance. This move underscores the persistent pressures on tech firms to navigate the volatilities of the public markets post-listing.
About Anghami
Founded in Lebanon in 2012 and now headquartered in Abu Dhabi, Anghami is the leading music and entertainment streaming platform in the Middle East and North Africa. It offers a vast library of over 100 million Arabic and international songs, podcasts, and other exclusive content to millions of users across the region and its global diaspora.
Looking Ahead
The proposed reverse stock split is a critical technical step for Anghami to secure its continued listing on the Nasdaq. The immediate focus will be on securing the necessary shareholder approval at the forthcoming EGM. Beyond this corporate action, the company will face continued scrutiny to demonstrate underlying business growth and a clear path toward profitability to restore long-term investor confidence and drive fundamental value in its shares.
Source: AGBI
