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Trumps’ American Bitcoin sinks 8.4% ahead of reverse stock split to stay listed
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American Bitcoin (ABTC) shares tumbled 8.4% to an all-time closing low of 62 cents on Wednesday, as the crypto miner prepares for a 1-for-15 reverse stock split to maintain its Nasdaq listing. The reverse split, approved by shareholders on June 22, will take effect after market close Thursday, with trading on a split-adjusted basis beginning Monday. The company expects outstanding shares to drop from over 1 billion to approximately 73 million. This move is widely interpreted as a sign of financial distress, as reverse splits artificially inflate share prices to meet exchange requirements.
The Trump family-backed firm, co-founded early last year by Donald Trump Jr. and Eric Trump, went public through a merger with Nasdaq-listed Gryphon Digital Mining. The Trump brothers and crypto miner Hut 8 collectively own about 98% of the newly formed entity. American Bitcoin is the only publicly traded crypto company directly linked to the Trump family’s expanding interests in the sector. Its decline mirrors a broader downturn in the crypto market, with Bitcoin trading around $60,000 early Thursday, down 32% year-to-date and more than half from its October peak of $126,000.
American Bitcoin’s stock has fallen over 63% year-to-date and more than 92% since its Nasdaq debut on September 3. The reverse split aims to lift the share price above Nasdaq’s $1 minimum bid requirement for 30 consecutive trading days to avoid delisting. The company reported a first-quarter loss of $81.7 million in May, adding to investor concerns. Such splits often indicate underlying financial weakness, as they do not address fundamental operational issues.
The reverse split is a last-resort measure to comply with exchange rules, but it carries risks. If the stock fails to sustain a higher price post-split, it may face renewed pressure. Other crypto firms have taken similar steps: Nakamoto completed a 1-for-40 reverse split in May after its share price fell to 16 cents. Market analysts view these actions as negative signals, typically suggesting a company is struggling.
Investor sentiment remains cautious amid the broader crypto rout. The Trump family’s involvement has drawn attention, but the company’s performance reflects sector-wide challenges rather than specific political ties. American Bitcoin’s ability to regain investor confidence hinges on improving its financial health and navigating volatile market conditions.
Looking ahead, the reverse split may provide temporary relief, but sustainable growth requires operational improvements and a crypto market rebound. Nasdaq delisting remains a threat if the stock dips again. The company’s high concentration of ownership among founders and Hut 8 also limits public float, which can exacerbate price swings. As the crypto industry faces regulatory and market headwinds, American Bitcoin’s fate will serve as a bellwether for smaller miners.
