Design Within Reach Tries a Reverse Stock Split to Bump Up the Value of Their Shares

Only having been with the company for nine months, Design Within Reach‘s still-new CEO John Edelman, is continuing down his promised path of big changes and turning the company around. Following successful marketing moves and patching up relationships with designers, now the company is trying to patch up its place in the stock market. Last summer, pre-Edelman, their stock had plummeted to the point where they voluntarily delisted themselves from Nasdaq, which was not a positive sign. Now, in the middle of their climb back up, they’ve announced a one-for-fifty reverse stock split of the company’s common stock. What this means in layman’s terms is that they’ll be adjusting the number of shares they offer by fifty (so if you had 50 shares, now you’d have just 1), while keeping the shareholder’s monetary value the same (your new 1 is worth the same as your old 50). This compression lets DWR raise the value of their shares and hopefully be more appealing to potential buyers. While there’s some stigma attached to putting this practice in place because often it’s an indicator that a company is in serious jeopardy, we’re not entirely sure how the situation will play out in this case, since DWR is digging itself out from being on its last legs and not still on its way down. It will be interesting to see how it all plays out.