Zhongchao Inc. (NASDAQ:ZCMD) experienced a dramatic price swing on Thursday, with shares jumping sharply in after-hours trading following a recent reverse stock split. The Shanghai-based healthcare information and patient services company saw its stock close the regular session at $1.11, down 0.89%, before soaring to $3.32 in after-hours trading, a gain of 199.10% as of 18:59 EDT.
The trading activity was characterized by exceptionally high volume. According to Webull, regular session volume reached 21.86 million shares. This figure is particularly notable given that the company's Class A share count has been significantly reduced through a series of reverse stock splits. After a 1-for-3 reverse split on June 29, Zhongchao expected to have approximately 1.15 million Class A shares outstanding, making the day's volume nearly 19 times that number.
Zhongchao has executed three reverse stock splits in 2026: a 1-for-8 split on March 2, a 1-for-31 split on June 8, and the most recent 1-for-3 split on June 29. These actions have collectively reduced the Class A share count from 25.75 million to just 1.15 million, a total split ratio of 1-for-744. The moves were aimed at maintaining compliance with Nasdaq listing requirements, as the company's stock price had fallen below the $1 minimum bid price.
The company's share capital structure has also undergone significant changes. On June 18, shareholders approved an increase in authorized share capital from $20 million to $10 billion, as disclosed in a later SEC filing. This amendment raised the Class A share pool to 36.29 billion shares at the prevailing par value. While the vote did not attract widespread attention, it could have significant implications for future dilution.
On the financing front, Zhongchao on May 29 set terms for a $5 million best-efforts offering, selling 9.26 million units at $0.54 per unit. Each unit consisted of either a Class A share or a pre-funded warrant, along with an additional warrant with an initial exercise price of $0.594, before any consolidations.
Zhongchao is a Cayman Islands holding company that operates through contractual arrangements with its PRC-based operating entities. Its business segments include online healthcare information services, physician training, patient management for tumor and rare diseases, internet healthcare, and a public health information platform, according to the company.
The broader market context also influenced trading. The U.S. economy added 57,000 jobs in June, well below the 110,000 forecast by Reuters. This softer data eased concerns about further Federal Reserve rate hikes. "It just takes the pressure off the Fed to raise rates in the short term," Adam Sarhan, CEO of 50 Park Investments, told Reuters. U.S. equities will not trade on Friday, July 3, due to the Independence Day holiday, according to Nasdaq's 2026 holiday calendar.
