Qutoutiao Inc. (QTT) stock plunged during premarket hours, given no current update.

Qutoutiao Inc. (NASDAQ: QTT) stock fell by 10.84% at last close whereas the QTT stock price gained by 7.03% in the premarket trading. Qutoutiao Inc. is a Chinese company that creates creative and fast-growing mobile entertainment platforms with the goal of providing pleasure and value to its users.


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QTT stock’ Past Development

On Dec 2, 2021, Qutoutiao informed its shareholders that they intends to modify the ADS Ratio of four (4) ADSs to one (1) Class A ordinary share, par value US$0.0001 per share, to two (2) ADSs to five (5) Class A ordinary shares. The company also mentioned that the modification in the ADS Ratio is expected to takeeffect on or around December 10, 2021.

The modification in the ADS Ratio would have the similar impact on Qutoutiao’s ADS holders as a one-for-ten reverse ADS split. Every ten (10) current ADSs owned by an ADS holder of record at the close of business on the day the change in ADS Ratio takes effect must be surrendered and exchanged for one (1) new ADS. As the depositary bank for Qutoutiao’s ADS programme, the Bank of New York Mellon will coordinate the exchange of current ADSs for new ones. The Nasdaq Global Select Market will keep trading Qutoutiao’s ADSs under the ticker “QTT.”

Furthermore,

There will be no fractional new ADSs issued as a result of the ADS Ratio adjustment. Rather, the depositary bank will combine and sell fractional rights to new ADSs. Furthermore, the depositary bank shall distribute to the applicable ADS holders the total cash proceeds from the sale of fractional ADS entitlements (after fees, taxes, and expenditures). The ADS Ratio change will have no effect on Qutoutiao’s base Class A ordinary shares, and no Class A ordinary shares will be granted or terminated as a result of the ADS Ratio change.

The ADS trading price is projected to rise correspondingly as a consequence in the ADS Ratio, while the Company cannot guarantee that the ADS trading price after the modification will be similar to or more than ten times the ADS trading price before the change.

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