American Bitcoin Corp (ABTC) has seen its shares plummet by 91% since going public, with a recent 1-for-15 reverse stock split failing to stabilize the stock price. The share price currently stands at $7.70, below the expected post-split opening price of $8.40.
Details of the Reverse Split
On July 2, ABTC executed the reverse stock split to comply with Nasdaq's minimum share price requirement of $1.00. Prior to the split, the stock was trading at only $0.56, exposing the company to the risk of delisting. The share count was reduced sharply from approximately 1.09 billion to about 73 million shares.
Financial Performance in Q1 2026
The company reported revenues of $62.1 million in the first quarter of 2026, marking a 20.7% decrease from the previous quarter. This decline was attributed primarily to falling Bitcoin prices, which have seen significant fluctuations from an all-time high of $126,000 in October of last year to around $58,000 in June. Despite these challenges, ABTC managed to reduce its cost per Bitcoin mined by 23%, maintaining a gross margin above 50%.
Market Sentiment and Comparison with Parent Company
Despite the reverse split addressing the immediate delisting threat, investor sentiment remains pessimistic. Reverse splits are often viewed as a superficial remedy that does not resolve underlying issues. In contrast, Hut 8, the parent company of ABTC, has experienced a prosperous year, seeing a stock price increase of 344% over the past 12 months. Currently, Hut 8 shares trade at $97.14.
No analyst upgrades or downgrades followed the Q1 earnings report, resulting in a lack of market confidence. The current Relative Strength Index (RSI) for ABTC indicates it is in oversold territory, but models suggest that the stock is still overvalued.
