Shares of the Qutoutiao Inc. (QTT) stock were declining in the current market after it announced its plan to change ADS Ratio Change. QTT stock price saw a downtrend of 16.58% to drop at $0.5006 a share at the time of this writing. The stock was green in the previous trade and went up by 0.02% at closing. Let’s dig in to understand more about this stock.

What’s Happening?

QTT stock is planning to change the ratio of its American Depositary Shares (“ADSs”) to its Class A ordinary shares. The par value is US$0.0001 per share. The company will change the ADS Ratio of four ADSs to one. Class A ordinary share to a new ADS Ratio of two ADSs to five Class A ordinary shares. This change will be effective on or about December 10, 2021.

The ADS change ratio will impose the same effect as a one-for-ten reverse ADS split. Every ADS holder will surrender on the effective date of the change in ADS ratio and exchange existing every ten ADSs then held for one new ADS. There is no chance of issuance of fractional new ADSs however depository back will sell an aggregate of fractional entitlements to new ADSs.

Financial View of QTT stock:

• According to second-quarter 2021 financial results, QTT stock generated RMB1,202.0 million in net revenues. This represents a 16.6% decrease as compared to 1,441.0 million in the same quarter of last year.
• The cost of revenues of the QTT stock decreased by 18.1% from Q2,2020 to drop at RMB327.7million in Q2,2021.
• The company recorded RMB874.2 million in gross profit in the second quarter of 2021. The gross profit decreased by 16.0% from the same tenure of the previous year.
• QTT stock suffered a net loss of MB209.5 million in the second quarter of 2021. In the same quarter of last year, the net loss of the company was RMB222.1 million. In the first quarter of 2021, QTT stock suffered an RMB149.0 million net loss.
• Net loss margin in the second quarter was 17.4% as compared to 15.4% in the same period of the previous year.
• The stock spent RMB136.2 million in research and development expenses in the second quarter of 2021.
• By the end of the third quarter, QTT stock had US$158.3 million in cash, cash equivalents, and short-term investments.

Wrap Up:

Investors are not happy with the recent news of the QTT stock as the stock is facing bearish sentiment today. The performance in 2021 is not so much satisfactory as this stock lost approximately 69% year to date.