Digital Brands Group, Inc. (DBGI) has confirmed it will execute a 1-for-40 reverse stock split, with the adjustment taking effect after market close on 24 July 2026. The company stated that the action is intended to raise its share price to satisfy continued listing requirements on the Nasdaq stock exchange.
Under the reverse split, every 40 existing shares of DBGI common stock will be combined into one new share. No fractional shares will be issued; instead, shareholders who would otherwise receive a fraction will be paid cash in lieu. The company's trading symbol will remain 'DBGI'.
Reverse stock splits are typically undertaken by companies whose share prices have fallen to very low levels, often below $1, which can trigger delisting warnings from major exchanges. DBGI's stock has faced significant pressure in recent months, with shares trading well below that threshold.
For UK investors holding DBGI shares through international brokerage accounts, the split will reduce the number of shares held but should not change the overall value of their position, assuming no market reaction. The adjustment also affects options and warrants in proportion.
Analysts note that while reverse splits can provide temporary relief from delisting risk, they do not address underlying business fundamentals. Companies that perform reverse splits sometimes continue to face financial challenges if profitability and revenue growth do not improve.
DBGI's announcement comes amid a broader trend of small-cap US firms using reverse splits to maintain exchange listings. UK pension funds with exposure to US small-cap indices may see indirect effects, though direct holdings are likely limited.