Digital Brands Group (NASDAQ: DBGI) Implements Reverse Stock Split and Fights Market Manipulation to Maintain Nasdaq Listing

• Digital Brands Group is executing a 1-for-40 reverse stock split on July 24, 2026, to meet the Nasdaq exchange's minimum bid price requirement of $1.00 per share.
• The reverse stock split will reduce the public float to approximately 557,000 shares, which could lead to increased stock price volatility.
• The company is actively pursuing legal action against alleged market manipulation, including naked shorting, and is demanding compliance from clearinghouses regarding unusual trading volumes.

Digital Brands Group (NASDAQ: DBGI) is an apparel and e-commerce company. The company's stock currently trades below the exchange's minimum price requirement. To address this, Digital Brands Group is taking significant steps to maintain its Nasdaq listing and stabilize its market position.

On July 24, 2026, Digital Brands Group will perform a 1-for-40 reverse stock split. This action consolidates shares, meaning for every forty shares an investor owns, they will receive one new share. The primary goal is to increase the stock's closing bid price to over $1.00 per share, a key requirement for remaining on the Nasdaq exchange.

As a result of this split, the number of publicly available shares, known as the float, will decrease to approximately 557,000. A smaller float can sometimes lead to higher price volatility, as fewer shares are available for trading on the open market.

In addition to the split, Digital Brands Group is taking legal action against potential market manipulation. As highlighted by Businesswire, the company has retained the law firm Christian Attar to investigate issues like naked shorting. Naked shorting is the illegal practice of selling shares that have not been confirmed to exist.

The company is also submitting compliance demands to clearinghouses regarding fails-to-deliver and unusual trading volumes. With its stock price at $0.64 and a market capitalization of about $5.21 million, these actions are part of a broader strategy to address its valuation and trading activity.