David Bailey's Nakamoto bitcoin treasury announces 1-for-40 reverse split as shares hit new lows

Nakamoto Inc (Nasdaq: NAKA) said Wednesday that it will enact a 1-for-40 reverse stock split later this week as the bitcoin (BTC) treasury company's shares continue to slide further below Nasdaq's minimum listing threshold.

The reverse split takes effect at market open on Friday and will keep the same NAKA ticker symbol.

The move is intended to help the company regain compliance with Nasdaq's $1 minimum price requirement.

Nakamoto shares dropped by more than 17% to $0.14 immediately after the announcement before recovering to $0.16. NAKA is now down roughly 99.5% from the $29 highs seen last May when the company revealed a merger with KindlyMD and its subsequent bitcoin accumulation and treasury strategy.

The company said the reverse split will reduce its outstanding common shares from about 696.1 million to 17.4 million, with holders receiving cash payments to cancel out any remaining fractional shares.

The decision was approved by investors at a shareholders meeting earlier this month, where the board was weighing a split ratio between 1-to-20 and 1-to-50. 

Tough first quarter

Earlier this month, Nakamoto reported a $238.8 million first-quarter net loss, driven mostly by a $102.5 million unrealized loss tied to bitcoin prices.

The company currently holds 5,058 bitcoins worth nearly $391 million after selling 284 BTC during the first quarter to fund working capital needs.

It stands as the 20th-largest public bitcoin holder according to Bitcoin Treasuries data, slightly behind Anthony Pompliano's ProCap Financial.

Nakamoto also launched an actively managed bitcoin derivatives strategy during the quarter to earn yield on its holdings. The company said this generated around 43 bitcoins in premiums before 40 BTC were later sold.

"We remain highly confident in the long-term earnings power of the company we are building," CEO David Bailey said in last week's earnings release. "Our focus for the remainder of 2026 is execution — scaling our operating businesses, expanding revenue opportunities, and continuing to build durable shareholder value through disciplined capital allocation and long-term conviction in bitcoin."