EpicQuest Education Group International Ltd (NASDAQ:EEIQ) experienced a sharp decline in its share price on Thursday, closing down 19.6% after the company said its board approved a 1-for-16 reverse stock split.
Under the approved plan, which is scheduled to take effect on February 17, 2026, EpicQuest's outstanding ordinary shares will fall from approximately 23.7 million to about 1.5 million. The corporate documents will also be amended to change the company's authorized capital structure.
Specifically, the company will reduce its authorized ordinary shares from 970 million to 60.6 million and cut its authorized preferred shares from 10 million to 625,000. Concurrently, the par value assigned to each share will be raised from $0.0016 to $0.0256.
EpicQuest, which delivers higher education services to domestic and international students across the United States, Canada and the United Kingdom, said it will continue to trade on the Nasdaq Capital Market under its existing EEIQ symbol. Trading will proceed with a new CUSIP number, G3104J142, once the split becomes effective.
The company stated that fractional shares will not be issued as part of the reverse split. Instead, holders who would otherwise receive fractional shares will be paid cash based on the closing price of the ordinary shares on a post-split basis on the first trading day following the split's effectiveness.
Context on reverse splits
The company noted that reverse stock splits are commonly used when issuers need to adjust share price levels, often to maintain compliance with exchange listing rules or to reach price thresholds that may be required by certain institutional investors. The announcement and the resulting market reaction in EpicQuest's stock illustrate the immediate market sensitivity to changes in share structure.
What this means for markets and participants
For investors and market participants, the move alters the company's outstanding share count, the authorized share pool and the par value per share, while leaving the ticker unchanged. The company will effect cash payments for any fractional entitlements based on the first post-split closing price, rather than issue fractional stock.