Why Nuburu Stock Is Tanking

Nuburu, Inc. BURU shares are trading lower Thursday after the company announced it will be implementing a 1-for-40 reverse stock split.

The Details:

The 1-for-40 reverse stock split will be effective June 24 and the company expects its stock to begin trading on June 25 on a split-adjusted basis. 

Nuburu announced the reverse split in a letter to shareholders which outlined the company's strategic vision and growth milestones. The letter also stated the company intends to settle additional amounts of debt once by obtaining shareholder approval to issue shares in excess of 20% of its outstanding common stock.

"Looking forward, I am excited and optimistic about the future of our Company. We are strengthening our relationships with our key financing partners, employees, customers, and vendors in order to advance the Company’s business plan and increase shareholder value. We will focus on maintaining the NYSE’s continued listing standards and propelling NUBURU toward sustainable operational success," said Nuburu CEO Brian Knaley in the shareholder letter. 

Related News: Virgin Galactic’s Board Approves Reverse Stock Split: What’s Going On With The Stock?

Is BURU A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Nuburu‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Nuburu does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Nuburu will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

BURU Price Action: According to Benzinga Pro, Nuburu shares are down 36% at 9 cents at the time of publication Thursday.

This image was generated using artificial intelligence via Dall-E 3.