Shares of Regencell Bioscience Limited (RGC) continued their downward trajectory in pre-market trading on Wednesday, plummeting 6.90% following the company's announcement of a 38-for-1 forward stock split. This sharp decline comes on the heels of an after-hours drop on Tuesday, signaling growing investor concerns about the biotech firm's valuation.

The stock split announcement, which will give shareholders 37 additional shares for each share held, appears to have triggered a reassessment of Regencell's market value. This comes amid an extraordinary rally that has seen the stock surge by more than 46,000% year-to-date, despite the company reporting no revenue. The lack of fundamental financial performance to support such gains has left many market observers puzzled.

While stock splits typically don't affect a company's intrinsic value, they often lead to price adjustments as the market digests the news. In Regencell's case, the split seems to have prompted investors to question the sustainability of the company's lofty valuation. As the market prepares for the stock split to take effect, all eyes will be on Regencell's ability to justify its valuation with concrete business developments in the coming days and weeks.