Shares of Interactive Strength (NASDAQ:TRNR) are tumbling on Friday following news that the company announced a significant 1-for-10 reverse stock split in an effort to regain compliance with Nasdaq listing requirements.
This decision comes amid recent volatility and a prolonged dip in share price, exacerbated by adverse statements from competitor Sportstech.
CEO Attributes Underperformance To Competitor Statements
In a recent shareholder letter, CEO Trent Ward expressed disappointment over the necessity of the reverse split, attributing the stock’s underperformance partly to misleading statements from Sportstech. Despite these challenges, Ward remains optimistic about the company’s growth trajectory, particularly following the acquisition of Ergatta, a move expected to significantly boost Interactive Strength’s revenue and market presence.
The acquisition of Ergatta is not just a strategic expansion but also a potential turnaround in Interactive Strength’s financial health. Ergatta, known for its subscription-rich business model, is anticipated to bring in over $30M in pro forma revenue for 2026. This acquisition aligns with Interactive Strength’s goal to enhance its product offerings and market reach, providing a more robust platform for growth and profitability.
Furthermore, the merger is expected to synergize with Interactive Strength’s existing portfolio, particularly following the successful integration of Wattbike. The combination of these brands under the Interactive Strength umbrella is projected to accelerate the path to profitability, a crucial step for the company as it aims to stabilize its financials and reassure investors.
Despite the immediate challenges posed by the reverse stock split, the strategic acquisitions and the ongoing efforts to counteract negative market forces are pivotal. As Interactive Strength navigates these turbulent times, the focus remains on growth through strategic mergers and maintaining compliance with market regulations, ensuring long-term sustainability and shareholder value.
Shares Tumble In Regular Trading
TRNR Price Action: Interactive Strength shares were down 44.32% at $0.24 at the time of publication on Friday, according to Benzinga Pro data.
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