Cyngn Inc. (NASDAQ: CYN) 1-for-100 Reverse Stock Split

The White Law Group is investigating potential claims involving broker dealers who may have unsuitably recommended Cyngn Inc. to investors.

Background on Cyngn Inc.

Cyngn Inc. (NASDAQ: CYN), an autonomous vehicle (AV) technology company, develops autonomous driving software.

In October 2021, Cyngn Inc. offered shares of its common stock for sale to investors. As of February 28, 2024, the average post offering return was –97.3%. The company’s common stock was traded on the Nasdaq Capital Market, or NASDAQ, under the symbol “CYN.”

According to its prospectus, investing in CYN’s securities is highly speculative and involves a high degree of risk.

Latest News: Cyngn Inc.

Cyngn has announced a 1-for-100 reverse stock split of its Common Stock in an effort to regain compliance with Nasdaq’s minimum bid price requirement. Approved by stockholders on June 25, 2024, the reverse split took effect at 5 p.m. ET on July 3, 2024.

This reverse stock split will consolidate every 100 shares into 1, impacting all stockholders equally, with equity awards and warrants adjusted proportionately. No fractional shares were issued, with any resulting fractions rounded up.

This significant 1-for-100 reverse stock split may indicate underlying risks or instability, which could raise concerns among investors.

Performance

As of July 6, 2024, according to Market Watch shares of Cyngn Inc. (NASDAQ: CYN) are down —93.72% YTD.

Risks Associated with Small Stock Offerings 

Lack of Information: Many small companies may not provide comprehensive financial disclosures or have limited operating histories.

Market Volatility: Small stocks can be more volatile than larger, established companies, leading to significant price fluctuations.

Liquidity Concerns: These stocks may have low trading volumes, making it difficult to buy or sell shares at desired prices.

Broker Due Diligence

Broker due diligence is a process undertaken by brokerage firms to ensure they are recommending and selling investment products appropriate for their clients. This process protects the interests of the brokerage firm and its clients by ensuring that the investments offered are suitable for the client’s investment objectives, risk tolerance, and financial situation.

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to disclose the associated risks adequately, they may be found liable for investment losses in a FINRA arbitration claim. Fortunately, FINRA provides an arbitration forum for investors to resolve such disputes.

Class Action vs. Individual FINRA Arbitration Lawsuit

You may wonder whether a large class action lawsuit is a better litigation option than an individual FINRA arbitration case.  The answer depends on many factors, but typically if the loss sustained is large (say larger than $100,000), an individual arbitration claim is likely a better option.  Class actions as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.

Free Consultation

If you have suffered investment losses in Cyngn Inc., you may have recovery options. The securities attorneys at The White Law Group offer free consultations and can be reached at 1-888-637-5510.

About The White Law Group 

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. The firm represents investors across the country in claims against their brokerage firms.