Kalera is an indoor vertical farm company with the stock symbol “KAL” as listed on NASDAQ. When I first purchased it I went in for 100 shares because it was running at around 0.13 per share. I was new to the market, and I wanted something cheap to learn with. I did learn a few things quiet quickly and enjoyed this stock during the process. First off I didn’t know there was a minimum price a stock has to keep at or above to remain listed, which in the case of NASDAQ appears to be $1.00. So by the time I bought KAL at 0.13 it was already in trouble, I just didn’t know what to look for. I just was thrilled that I could spend pennies on the dollar and maybe something would rocket upward later.
As I bought stock from other companies, although in much smaller quantities, and watched the daily fluctuations of them all a few things became obvious. Volatility of KAL was high compared to most of my stocks, but it was on a pretty intense downward streak. This is where I point out that aside from price what also attracted me to Kalera was what it is, which is a pretty kick ass sounding agricultural venture. But a business attempting to break traditional molds, such as this one trying to make vertical farming more of a reality, is going to face a struggle by default, since that’s a newer method of farming and there are a lot of hurdles and challenges that need to be overcome. That’s got to be a struggle, but I would start finding some news stories where there had been setbacks; a recall of some product, a restructuring at a facility. Things happen. But I still enjoyed watching this stock and learning from it, and rooted for them (pun intended.)
It seemed like on days when the stock market was driven by fear, KAL would get traded more. My theory there is that when people are too chicken to trade more expensive stocks, smaller ones move more. Perhaps because people like to fidget, or the rush of executing a trade. I’m not sure this theory bears any real weight however, but I watched, mostly while losing just a few dollars in the process.
So back to the learning, if NASDAQ requires a minimal price to stay listed, and a company is well under that price, something has to happen. And nothing seemed to be happening except for this slow further decline. I was learning simultaneously that a component a healthy company really must have is to have constant news releases and buzz about themselves. I wasn’t seeing much of anything coming out of random stock news or from the Kalera website. Finally there was news wherein the company decided to do a REVERSE SPLIT on the stock. This was a new concept to me, but basically the solution to stay listed on NASDAQ became to convert 100 shares worth of the stock into a single share, therefor increasing the value of the remaining single share so that it is high enough to stay on the market. So my joy of looking at 100 shares of something vanished, to only look at 1 single share. And that’s about the present point where I write this, waiting to see how a company fares after a reverse split.
Key Takeaways:
- Stocks that are priced too low might have issues.
- Each exchange has their own rules for being listed.
- Healthy stocks typically have active news about them, both self published and externally published. Silence is not golden.
- Reverse Splits are solutions to elevate a stock price.
- Reverse Splits seem to take a few days, as I’m still waiting for the stock to be active again at my brokerage account.
On a final note, we’ve also just had a pretty cold winter across the country and it seems like a company trying to grow vegetables indoors might be positioned right to thrive in that situation. So the future should be fun and educational as this stock either bounces back or completely tanks. It’s a $13 loss for me to keep holding it and seeing how it goes worst case scenario, but I’m kind of enjoying the experience and glad I’m not having this experience from a pricier entry point!
