Adicet Bio, Inc. (ACET) is having a rough day after announcing plans for a one-for-16 reverse stock split, sending shares down nearly 6%.

Here's what's happening: The clinical-stage biotechnology company needs to stay listed on the exchange, and reverse splits are a classic move when a stock's price has drifted too low. The minimum bid price requirement exists for a reason, and Adicet is taking action to meet it.

The reverse split goes into effect on Dec. 30. When the dust settles, the company's outstanding share count will shrink dramatically from approximately 153.3 million shares to about 9.6 million shares. The board approved the plan after stockholders green-lit a range of possible ratios at a special meeting last week.

The company will make proportional adjustments to stock included under its equity incentive plans, though no fractional shares will be issued.

Price Movement: Adicet Bio shares were trading at 49 cents, down 5.78% at the time of publication.