Sirius XM Holdings announced a 1-for-10 reverse stock split for its shareholders when it merges with Liberty Media’s SiriusXM Group tracking stock later this year, sending the streaming and satellite radio company’s stock up 4.5% on Tuesday (June 18).

The stock split, which was announced in a filing on Sunday (June 16), is meant to reduce the overall share count and boost SiriusXM’s stock price. The Nasdaq-listed company has seen its stock price fall by more than 65% from a 52-week high of $7.95, leading the Nasdaq to drop SiriusXM from its Nasdaq-100 Index last Thursday (June 13).

The stock split and the combination of the two publicly listed companies into a new SiriusXM stock — a deal expected to close in the third quarter — are financial wranglings aimed at improving value for investors, executives have said.

SiriusXM is attempting to gain a foothold in the streaming market with the rollout of its new phone-based streaming app, which executives say offers up a wider range of tailored content for users. The app is also an attempt to reduce the company’s reliance on customers subscribing through their vehicles.

Investments in the app, however, were costly, and SiriusXM has announced two separate rounds of layoffs over roughly the past year.

The stock split should help reduce the dilution that resulted from the company issuing stock to raise money, says David Schulhof, founder of the music company exchange-traded fund MUSQ.

“The company has faced some headwinds in the ad and auto markets and they also raised a lot of money to roll out their music streaming service to compete with the likes of Spotify,” says Schulhof.

“But that is really where they should go,” he adds. “With 87% of all music consumption dominated by streaming, they really needed to figure out a streaming strategy quickly.”

The company is hopeful that the revamped app, which launched in December and costs $9.99 per month, will attract new subscribers and drive revenue growth.