The board of directors of Egghead.com, the troubled online retailer of technology products, has authorized a reverse stock split as part of a strategy to avoid being delisted from the Nasdaq, Egghead said Monday. The company said it is still considering the range of the split, which must also be approved by shareholders. Reverse stock splits, which have failed to work for scores of other ailing tech companies, are designed to artificially boost the price of a stock.
The company is considering whether to offer shareholders one new higher-priced share for every five or 10 older shares, Egghead said. Companies risk delisting if they cannot maintain a $1 minimum share price for 30 days. Egghead's stock last topped a dollar on May 2.