Does Reebonz’s latest reverse stock-split exercise matter to investors?

Samuel Lim, founder and chief executive officer of Reebonz Pte, poses for a photograph at the company's headquarters in Singapore, on Friday, Jan. 2016. Photographer: Nicky Loh/Bloomberg

Since it started trading on Nasdaq in December 2018, Singapore-based online marketplace luxury goods e-commerce player Reebonz Holdings Limited (RBZ) has seen its stock price go on a roller-coaster ride from a high of around $10 to as low as $0.86 before closing at $8.50, following a one-for-eight reverse stock split exercise announced on March 15, 2019.

While this is not a stock for the ‘weak hearted’, there are concerns among investors whether the various swings in the stock price are due a relatively small float of 405,150 shares (pre-reverse stock split), or due to some underlying issue with the overall fundamentals.

While most investors are relieved by the latest moves by Reebonz to ensure it meets the listing requirements on the Nasdaq Stock Exchange on March 29, the longer-term concerns will still be focused on the management’s ability to create value add for shareholders.

To recap, Reebonz merged with Nasdaq-listed Draper Oakwood Technology Acquisition (DOTA) last year and, on December 20, DOTA started trading as Reebonz Holding Ltd (RBZ). However, six days after it started trading, RBZ disclosed in an SEC filing that it did not meet Nasdaq’s minimum shareholders’ equity requirement of $4 million. Subsequently, the company’s warrants were suspended on February 27. Reebonz’s ordinary shares continue to be listed on the Nasdaq Capital Market. It now has until March 29 to meet the requirements

Reebonz is backed by Vertex Ventures, GGV Capital and Intel Capital. Early in January, Singapore-based Vertex Ventures acquired $5 million worth of common shares in RBZ. Another UK-based investor, S4 Limited, also agreed to acquire 1 million shares of Class A common stock in RBZ, according to an SEC filing.

DEALSTREETASIA digs deeper to analyse the company’s moves related to its recent reverse stock split, its preliminary earnings and also its guidance figures. 

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.