Sonoma Pharmaceuticals Inc (NASDAQ:SNOA) shares are trading lower by 11.9% to $0.19 Wednesday morning after the company announced a 1-for-20 reverse stock split.

The stock will trade on a split-adjusted basis starting August 30, 2024. This move aims to meet Nasdaq's $1.00 minimum bid price requirement. As a result, every 20 shares of Sonoma's common stock will be consolidated into one share, reducing the total outstanding shares from 20 million to 1 million.

No fractional shares will be issued; instead, shareholders will receive cash for any fractions. The authorized shares will also increase from 24 million to 50 million.

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Should I Sell My SNOA Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Shares of Sonoma Pharmaceuticals have lost 75.9% year to date. This compares to the average annual return of -66.61%, meaning the stock has underperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.

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SNOA has a 52-week high of $1.02 and a 52-week low of $0.12.