MannKind Corp.’s post-split stock had a difficult initial day of trading on the market Friday, closing down nearly 13 percent.
The stock opened Friday at $2.38 but closed at $2.12. It had closed at 49 cents the previous day before the reverse stock split went into effect.
Late last month, shareholders voted to implement the 1-for-5 reverse split to prevent the struggling company from being delisted on the Nasdaq Stock Market.
Reverse splits are typically held to increase a stock price above the Nasdaq’s listing threshold of $1 a share. This is accomplished by reducing the number of shares but increasing the value of each share proportionately.
Prior to Friday, MannKind’s stock hadn’t traded above $1 since August.
The Valencia biotech has had trouble getting its only commercial product, inhalable insulin Afrezza, off the ground, negatively affecting stock price.
However, during the company’s most recent conference call, the MannKind executive team outlined a new marketing plan that includes hiring more in-house sales representatives and increased online, social media and television advertising.