What Happened?
Shares of pool products retailer Leslie’s (NASDAQ: LESL) fell 15.6% in the morning session after the company announced in a regulatory filing that its board of directors approved a 1-for-20 reverse stock split.
A reverse stock split consolidates a company's existing shares into fewer, higher-priced shares. While the move doesn't alter the company's overall market value, it is often viewed negatively by investors. Such actions can be interpreted as a sign that management lacks confidence in the company's ability to increase its share price through operational performance. The market's reaction suggests investors are concerned about the company's underlying health, prompting a significant sell-off following the news.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Leslie's? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Leslie’s shares are extremely volatile and have had 83 moves greater than 5% over the last year. But moves this big are rare even for Leslie's and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 22 days ago when the stock gained 4.4% after a continuation of positive technical momentum. The stock's movement appeared to be driven by technical factors rather than fundamental company news. On the previous trading day, Friday, August 22nd, Leslie's stock saw a significant gain of 7.89% on increased trading volume, which is considered a positive technical indicator. According to market analysis, a "buy signal" was issued from a pivot bottom point on August 12, 2025, suggesting potential for a further rise and contributing to the recent upward momentum.
Leslie's is down 87.9% since the beginning of the year, and at $0.28 per share, it is trading 92.2% below its 52-week high of $3.51 from November 2024. Investors who bought $1,000 worth of Leslie’s shares at the IPO in October 2020 would now be looking at an investment worth $12.68.
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