Tidal Announces 1-for-20 Reverse Stock Split for 2x Short MSTR ETF (SMST)
Tidal Trust II has approved a 1-for-20 reverse stock split for the Defiance Daily Target 2X Short MSTR ETF (SMST), listed on NASDAQ. The reverse split will take effect after trading closes on May 22, 2025. This action will reduce the number of SMST shares in circulation and proportionally increase the price per share. The SMST ETF is a leveraged fund that seeks to deliver twice the inverse daily return of MicroStrategy Inc. (MSTR). Such reverse stock splits are commonly implemented to maintain share prices above minimum exchange requirements and improve marketability of leveraged ETFs. Traders should note heightened volatility and possible liquidity changes following the split. This move comes as MicroStrategy and related leveraged ETFs remain in focus among traders seeking exposure or hedges in the cryptocurrency market sector.
Neutral
Reverse stock splits for leveraged ETFs like SMST mainly serve to maintain compliance with exchange listing requirements and have minimal direct impact on underlying assets such as cryptocurrencies. While the adjustment may affect share price and short-term liquidity, it does not change the ETF’s investment strategy or exposure to MicroStrategy, a company known for its significant Bitcoin holdings. Historically, such splits are administrative and do not alter broader market sentiment towards cryptocurrencies or related equities. Therefore, this announcement is likely to have a neutral effect on the wider crypto market.