Nakamoto Inc. is moving forward with a reverse stock split as it works to preserve its listing on the Nasdaq and stabilize its share price amid significant volatility tied to its bitcoin-focused strategy.
Reverse split to lift share price above nasdaq minimum
Nakamoto Inc. will execute a 1-for-40 reverse stock split on Friday in an effort to bring its share price back above Nasdaq’s minimum listing requirement. The move will consolidate about 696 million outstanding shares into roughly 17.4 million, with holders receiving cash in lieu of fractional shares. The company will continue to trade under the NAKA ticker once post-split trading begins.
Market reaction and share price collapse
The announcement triggered a sharp selloff. Shares fell more than 17% to $0.14 before edging back to $0.16 in later trading. The stock has lost about 99.5% of its value since touching $29 in May 2025, when Nakamoto completed its merger with KindlyMD and adopted a bitcoin-focused treasury strategy.
Reverse stock splits are a common tool used to mechanically raise a company’s share price and avoid delisting. In markets, such moves are often read as a sign of financial strain, a perception reflected in the immediate double-digit slide in Nakamoto’s stock.
Shareholder approval and split parameters
The 1-for-40 ratio was approved earlier this month after shareholders weighed a range of options from 1-for-20 to 1-for-50. The action does not change Nakamoto’s overall market capitalization directly, but significantly reduces its share count while aiming to lift the per-share price to levels acceptable under Nasdaq rules.
Heavy quarterly loss tied to bitcoin volatility
For the first quarter of 2026, Nakamoto reported a net loss of $238.8 million. The result was driven largely by a $102.5 million unrealized markdown on its bitcoin holdings, underscoring the earnings volatility that comes with a balance sheet anchored to a single, highly volatile digital asset.
The firm sold 284 BTC during the quarter to meet working capital needs. It now holds 5,058 bitcoins, valued at approximately $391 million at recent market prices.
Bitcoin holdings and derivatives strategy
Public data on corporate bitcoin treasuries places Nakamoto twentieth globally by holdings, just behind ProCap Financial. While that ranking highlights the scale of its exposure, it offers little protection when markets turn, as shown by the nine-figure markdown booked in the quarter.
Alongside its spot holdings, Nakamoto ran an active bitcoin derivatives program during the period. That strategy generated 43 BTC in premiums, of which 40 BTC were later sold, adding another layer of dependence on digital asset market conditions.
Strategic focus and scrutiny ahead
Chief Executive Bailey said the company’s near-term strategy is centered on “operational scaling and disciplined capital deployment” to improve financial performance. Nakamoto plans to continue leveraging its bitcoin position while seeking longer-term revenue growth from its treasury and trading operations.
Bailey’s commitment to discipline will likely face heightened scrutiny after the reverse split and large quarterly loss. The sale of 284 BTC to fund operations points to a growing reliance on liquidating core assets to support the business, a pattern that could prove difficult to sustain if bitcoin prices remain under pressure or become more volatile.
Curious how such moves affect crypto markets? Learn how ETFs influence trading dynamics for bitcoin-linked stocks.
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