The 65.89% decline in MicroAlgo Inc.'s (MLGO) share price from August 2024 to August 2025 can be attributed to several key market events and financial developments during that period. Fintel data confirms this significant drop, with the share price falling from $27.00 on August 7, 2024, to $9.21 on August 6, 2025.1
Key contributing factors include:
- Decreased Revenues and Gross Profit in H1 2025: MicroAlgo experienced a notable decline in its financial performance during the first half of 2025. For the six months ended June 30, 2025, the company reported revenues of RMB 188.1 million (approximately USD 26.3 million), a significant decrease from RMB 290.4 million in the same period of 2024. Concurrently, gross profit fell from RMB 87.5 million in H1 2024 to RMB 51.6 million in H1 2025.2 This substantial year-over-year reduction in top-line and gross-profit performance likely eroded investor confidence and put downward pressure on the stock.
- 30-for-1 Share Consolidation (Reverse Stock Split): On July 14, 2025, MicroAlgo announced that a 30-for-1 share consolidation, or reverse stock split, became effective on July 18, 2025. This action, approved at an Extraordinary General Meeting on July 2, 2025, aimed to reduce the number of outstanding shares.2 Reverse stock splits are often viewed negatively by the market, as they can signal a company's struggle to maintain its stock price above minimum exchange requirements or to artificially boost its share price. Such events frequently lead to further declines if the underlying business fundamentals do not improve.
- Issuance of Convertible Notes: The company also entered into convertible note purchase agreements with investors during the six months ended June 30, 2025.2 While convertible notes can provide capital, their potential conversion into equity can dilute existing shareholders, creating a disincentive for investors and contributing to stock price weakness.
- Impairment Loss on Investments: MicroAlgo reported an impairment loss of approximately RMB 1.1 million (USD 154,072) on long-term investments for the six months ended June 30, 2025.2 Although smaller in scale, such losses can add to a narrative of financial underperformance.
These events, particularly the significant revenue decline in early 2025 and the widely perceived negative signal of a reverse stock split, collectively contributed to the substantial decrease in MLGO's share price over the specified period.
