Posts related to ‘Stock Splits’

Unisys’ Futile Reverse Stock Split Approval (UIS)

Broken Money Merger ImageUnisys Corporation (NYSE: UIS) must not have learned the valuable lesson that many other troubled technology firms have learned about reverse stock splits.  This morning came the announcement that the company’s board of directors has approved a 1 for 10 reverse stock split of the company’s common stock, and this is the formality as it follows a shareholder approval of a reverse split with a ratio of one between 1 for 5 and 1 for 20.  The good news is that this hasn’t hurt shares this morning.  The bad news is that these reverse splits generally do not work.
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Posted on: October 6, 2009 – 11:21 am in Stock Splits, Technology Companies,

SIRIUS XM Reverse Split Now Almost Certain (SIRI)

sirius-logoSIRIUS XM Radio Inc. (NASDAQ: SIRI) almost had a very bad day on Friday.  Shareholders of the biggest penny stock of them all should probably be thankful that the stock only closed down 1.4% at $0.6798.  What is interesting is that the trading volume was ‘only 40 million shares’ compared to an average volume of over 60 million shares.  The stock had been down as much 4% on the NASDAQ warning letter over the $1.00 stock rule.  Now that the market has rebounded so much, we are getting a sense that that the old $1.00 rule 5450(a)(1) is going to start getting enforced again.  In the case of SIRIUS, our thought here is that this will make the pending reverse split almost a certain event.
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Posted on: September 19, 2009 – 1:40 pm in Cult Stock, Media, Satellite, Stock Splits,

Citi Now 33.6% Gov’t Owned… Reverse Split Seems Imminent (C)

Broken Money Merger ImageCitigroup, Inc. (NYSE: C) is going to have a very active day ahead of it.  The troubled banking giant has just announced that its common stockholders approved the three resolutions submitted in its Common Proxy Statement dated June 18, 2009.  If Citi does not need a reverse split just to chop down the number of shares, then no company ever did.  The company has been authorized to effect a reverse split, although it is not required to, in the new situation.  And Uncle Sam now owns 33.6% of the company.
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Posted on: September 3, 2009 – 9:46 am in Banking, Financial Stocks, Shareholder Issues, Stock Splits, Turnarounds,

ETF Reverse Splits Have Arrived… More Looming? (FAS, FAZ)

Broken Money Merger ImageWhen we first floated the notion that Direxion may need to consider conducting a reverse stock split on its two Triple-Leverage cult ETFs for the financial sector, this was a notion that was not that popular despite the company’s hint that a reverse split was likely before the market temporarily interrupted that need.  Now this morning we are seeing the Direxion Financial Bull 3X Shares (NYSE: FAS) and the Direxion Financial Bear 3X Shares (NYSE: FAZ) have adjusted prices to be based around reverse splits.  It is the ex-date.
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Posted on: July 9, 2009 – 7:23 am in Banking, ETF, Financial Stocks, Stock Splits, Trading Alert, ,

Quantifying Triple Leverage ETF Performance vs. Target Index (FAS, FAZ, BGU, BGZ, ERX, ERY)

Burning Money PicMoney Stack ImageDirexion has issued its semi-annual report for its triple leverage ETF holders and there are some interesting revelations here.  While there are many others covered, we wanted to demonstrate some of the differences among the Direxion Daily Financial Bull 3X Shares (NYSE: FAS), Direxion Daily Financial Bear 3X Shares (NYSE: FAZ), Direxion Daily Large Cap Bull 3X Shares (NYSE: BGU), Direxion Daily Large Cap Bear 3X Shares (NYSE: BGZ), Direxion Daily Energy Bull 3X Shares (NYSE: ERX), and the Direxion Daily Energy Bear 3X Shares (NYSE: ERY).
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Posted on: July 7, 2009 – 10:04 am in ETF, Index, Mutual Funds, Stock Splits, Trading Alert, , , , , ,

Rite Aid’s Turnaround Looking More Likely (RAD)

Rite Aid LogoRite Aid Corporation (NYSE: RAD) may have just made the last or one of the last announcements that saved the reputation as far as it being a stock that investors would stay interested in.  The drug store chain announced that it has received notice from the New York Stock Exchange that Rite Aid is now back in compliance with the exchange’s share price listing requirement now that its closing share price on June 30, 2009 and its average closing share price for the prior 30-days of trading were both above $1.00.  This will keep the company from pursuing that awful proposed reverse stock split.  These are not the only positive things happening for the company and for the stock.
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Posted on: July 1, 2009 – 2:10 pm in Retail, Stock Splits, Turnarounds,

AIG’s Futile Reverse Split To Nowhere (AIG)

AIG LogoAmerican International Group Inc. (NYSE: AIG) is under pressure.  This morning is the effective date of a 1 for 20 reverse split.  Our closing bell price was $1.16 yesterday, and that would imply a $23.30 share price this morning.  Just one problem.  The “20-factor” is not even close as the very early trading indications are down by almost one-third and trading around the $15.00 handle in early trading.

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Posted on: July 1, 2009 – 6:28 am in Financial Stocks, Stock Splits, Trading Alert,

A Reverse Stock Split in ETFs, More Likely To Come (MWN, FAS, FAZ)

Burning Money PicDirexion issued a press release noting that it was conducting a one-for-two reverse stock split on for its triple-leverage ETF called the Direxion Daily Mid Cap Bear 3X Shares (NYSE: MWN).  We have actually been waiting for the exact same news, albeit on a larger reverse split scale, on the financial triple-leverage ETF’s and ETN’s.  We feel this needs to occur on the Direxion Daily Financial Bull 3X Shares (NYSE: FAS) and in the Direxion Daily Financial Bear 3X Shares (NYSE: FAZ).  These other two ETF’s track the Russell 1000 Financial Services Index with triple leverage, but they are much more volatile because of the derivatives and because there are too many variations in the NAV versus the actual share price at certain times of the day.  The low share prices also allow even the smallest of fast money traders to get in and out with too little skin in the game.
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Posted on: June 22, 2009 – 2:15 pm in ETF, Index, Stock Splits

SIRIUS XM Gets Closer To Reverse Stock Split (SIRI)

SIRIUS LOGOIn most years, shareholder meetings are not full of much change.  This year has been very different in that manner, and SIRIUS XM Radio Inc. (NASDAQ: SIRI) just sealed its share fate on the share count and on a split as it voted to increase the authorized share count and then making an adjustment that would allow for a  pending reverse stock split.
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Posted on: May 27, 2009 – 3:29 pm in Editor's Picks, Media, Satellite, Shareholder Issues, Stock Splits,

Legalized Medical Marijuana Company Now Public Stock, Really (CVIV)

med-mar-imageIf you thought that the legalized marijuana for medicinal purposes was a controversial, imagine how controversial it would be if a company was public in the sector of legalized marijuana.  Forget the “if” in the equation.  This week, a small and formerly unknown company called Club Vivanet announced that it is the first public company to enter the legalized, medical marijuana business.  The company even changed its name to Medical Marijuana, Inc.  While it does not trade on the NYSE nor on the NASDAQ, the stock does trade over-the-counter under the ticker “CVIV” and is listed as Medical Marijuana, Inc. (OTC: CVIV) on the pink sheets.
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Posted on: April 3, 2009 – 8:50 am in Commodities, Consumer Goods, Cult Stock, Drug companies, Entertainment, IPOs, Medical, OTC, Pharmaceuticals, Politics, Regulation, Stock Splits, Tobacco,

Citi Plans Reverse Split & Share Conversions (C)

If you thought things were going to get quiet at Citigroup, Inc. (NYSE: C) after the 200% run up of late, they aren’t if this morning’s news comes to fruition.  The company has issued a share exchange offer for outstanding convertible and non-convertible preferred and trust preferred securities and it is going to seek a reverse stock split.
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Posted on: March 19, 2009 – 6:42 am in Banking, Bonds, Stock Splits,

Would Direxion Financial Bull 3X Consider Reverse Split? (FAS, FAZ)

broken-money-merger-image2Day traders, ETF investors, hedgers, swing traders, and more have been using the Direxion financial leveraged ETF’s as their go-to trades in the financial sector.

Direxion Financial Bull 3X Shares (NYSE: FAS) is the triple-bullish leverage ETF for financials, and the Direxion Financial Bear 3X Shares (NYSE: FAZ) is the triple-bearish leveraged ETF for financials.  These funds have only been trading since November 2008, but in order to curb some of the price parameters and the volatility of these ETFs, we wonder whether they WOULD THEY CONSIDER A REVERSE SPLIT?
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Posted on: March 13, 2009 – 2:53 pm in Banking, ETF, Financial Stocks, Stock Splits, ,

Rite Aid Yells ‘Do Over!’ on Reverse Split (RAD)

rite-aid-logoRite Aid Corp. (NYSE: RAD) may be hoping that its $0.22 share price won’t be as important down the road as it would have been when the NYSE was actively delisting companies because their shares were under $1.00.  The company’s prior plan for a reverse stock split is being “delayed” now that the NYSE has suspended its minimum price share listing rule.
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Posted on: March 9, 2009 – 8:06 am in Retail, Stock Splits, Turnarounds

Myriad Did What??? A Stock Split? (MYGN)

How long has it been since a company announced a stock split?  More importantly, when was the last from a fairly large company?  I can’t recall that off the top of my head either.  Mryiad Genetics, Inc. (NASDAQ: MYGN) just approved a 2-for-1 stock split.
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Posted on: February 24, 2009 – 4:10 pm in Biotech, Stock Splits,

Rite Aid Problems Mounting (RAD)

Rite_aid_logo_2The problems are mounting for Rite Aid Corporation (NYSE: RAD).  Yesterday, the  drug store operator received a non-compliance letter from the NYSE over its shares trading under $1.00 for the last 30-day period.  The company is taking a special step to fix this issue, but it has continued issues that it require its attention.

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Posted on: October 17, 2008 – 8:14 am in Exchange News, Retail, Shareholder Issues, Stock Splits,

IAC/Interactive’s Do or Die Date Has Come (IACI, IACID, HSNI, IILG, TKTM, TREE)

Iaci_logoToday marks the break-up for IAC/Interactive, which trades asunder the IACI and IACID tickers after the August 11, 2008 record date.  IAC/Interactive is going to begin trading on a post-split basis to reflect the break-up today.  The company’s spin-off symbols are as follows:

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Posted on: August 21, 2008 – 7:31 am in Internet, Management Change, Shareholder Issues, Stock Splits, Turnarounds, , , , , ,

Vanguard Splitting Some ETF’s; A Smart Move (VTI, VWO, VXF, MER)

There has been an interesting development in ETF Land, and it may actually help Joe Q. Public in its ability to own shares in each of these ETF’s.  Vanguard Group is going to split the shares on a 2 for 1 basis on three of its most popular exchange traded funds.

A 2 for 1 split will occur in the shares of the following ETF’s:

  • The $10.8 billion sized Vanguard Total Stock Market ETF (AMEX: VTI) which closed at $141.25 and has an average daily volume of 530,000 shares;
  • The $7.6 billion sized  Vanguard Emerging
  • Markets ETF (AMEX: VWO) which closed at $102.96 and has an average daily trading volume of 934,000 shares;
  • and the $13.3 billion sized Vanguard Extended Market ETF (AMEX: VXF) which closed at $107.25 which has an average daily trading volume of 113,000 shares.

The truth is that stock splits on the surface do not matter other than it being a mental game.  On an ETF it cannot create an artificial impact on the holdings as the underlying holdings cannot be affected by a move of this sort.  But what it can easily do is make it easier for retail investors to buy 100 shares of each, and that in turn may help increase the trading volume and liquidity of each ETF.

Normally we view stock splits with some caution, but this move actually makes sense.  This could actually portend a similar ETF share split out of several other ETF families whose ETF’s are less actively traded than many ETF’s and whose share prices are much higher.  Merrill Lynch (NYSE: MER) is a prime example of an ETF series parent who might want to watch this move closely.  Its HOLDRS ETF series can only be purchased in lots of 100 shares because of those old distribution rights that were in the ETF’s.

Now if Vanguard could just keep its founder John Bogle from publicly bashing ETF’s every time he makes television appearances…..

Jon C. Ogg
June 5, 2008

Posted on: June 5, 2008 – 7:41 pm in ETF, Stock Splits, , , ,

IAC/Interactive vs. Liberty: Diller Trumps Malone (IACI, LINTA, LCAPA, LMDIA)

IAC/InteractiveCorp. (NASDAQ: IACI) and Liberty Media Corporation (NASDAQ: LINTA) (NASDAQ: LCAPA) (NASDAQ: LMDIA) have settled their disputes, and it looks like Barry Diller Came out on top of John Malone.

We covered this scenario in our SPECIAL SITUATION newsletter that went out on April 2, 2008 at $21.22; and the intro to subscribers was as follows:

  • ….Our current pick is IAC/Interactive (NASDAQ: IACI), and we gave three likely scenarios we believe to occur. Our downside target limits the implied risk to 12% if you hedge your transaction as we would do. The upside would be an implied 33% to more than 50% if the scenarios pan out the way we expect. Barry Diller isn’t entirely out of the soup yet and Malone may have some more tricks up his sleeve. After the ruling came out we ran the hard detailed numbers and eyeballed various probabilities for this call….

Liberty has agreed to drop its appeal and will not oppose the proposed single-tier spin-offs of HSN, Interval International, Ticketmaster and Lending Tree.  IAC advanced those filings earlier today by making its initial filings with the SEC.  This is all within our line of expectations and should clear the way to the unlocking of value.

Liberty & IAC also agreed on a number of arrangements regarding the governance of the spun off companies as follows:

  • Liberty’s right to board representation on each company,
  • a standstill agreement that limits Liberty’s ability to increase its ownership stakes,
  • and to take a variety of other actions with respect to the spun off companies.

You can join our open email distribution list to hear about other break-ups, IPO’s, secondary offerings, special financings, mergers, spin-offs, and other special situations.

John Malone may be happy with what he got here and he may not, but as far as we are concerned this looks like a clear win for Barry Diller.  IAC shares closed up 2.7% at $23.00 in normal trading today, and shares are up over 3% at $23.85 in after-hours trading.

Jon C. Ogg
May 12, 2008

Jon Ogg produces the twice-monthly SPECIAL SITUATION INVESTING subscriber newsletter and he can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 13, 2008 – 4:42 pm in Earnings, Internet, Law, Media, Shareholder Issues, Stock Splits, , , ,

Revlon Tries Reverse Stock Split Game, And Gives Guidance (REV)

If you have followed shares of Revlon, Inc. (NYSE: REV), you already know what a long-term let down this stock has been.  Despite years of having top models pedal its wares, it’s stock has been a financial disaster.

Management has decided to play one of the oldest shell games on Wall Street.  Its board of directors just announced a REVERSE STOCK SPLIT with a 1 for 10 ratio.  So now 1,000 shares will become 100 shares.  management called this an effort to appeal to a broader base of shareholders, comply with NYSE listing standards, and reduction in certain costs.

The company is also giving preliminary guidance.  It sees set sales of approximately $320 million, compared to $328.6 million in the first quarter of 2007.  First Call only shows one estimate and that was for $350 million.  Other guidance is as follows:

  • Operating income of approximately $30 million, compared to $3 million reported in Q1-2007;
  • Net loss of approximately $5 million, compared to a net loss of $35.2 million in Q1-2007;
  • Adjusted EBITDA of about $55 million, compared to $32.3 million in Q1-2007.

The company said that net sales in Q1-2007 benefited from the initial shipments related to its launch of Revlon Colorist haircolor, which was the primary driver of the change in net sales year-over-year.  But Revlon is also discussing improvements this year as "significant improvement" in it preliminary operating income, as well as its net loss and its Adjusted EBITDA in Q1-2008.  Management also called 2007 one of its best years in many and that it has remained committed to generating profitable sales growth and positive free cash flow.

Shareholders don’t really need to do much here as far as any action, because the Ron Perelman entity called MacAndrews & Forbes that has a combined Class A & B total voting power of 74% of the voting power has already approved the reverse split.

You can join our open email distribution list to hear about special financings, secondary offerings, IPO’s, M&A, and more previews for other special situations in various stages.  Revlon has also been reviewed for our weekly "10 Stocks Under $10" newsletter, although the debt has always been far too high for our preferences.

Revlon shares are now down about 6% on the news to $0.90 today.  This will mark a new-52-week low as the prior range was $0.91 to $1.48.  Five years ago, this was a $3 to $4 stock; and until early 2006 it had mostly traded in a range from $2.00 to $3.50.  Shares used to trade exponentially higher than today.

Jon C. Ogg
April 11, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at jonogg@247wallst.com and he does not own securities in the companies he covers.

Posted on: April 11, 2008 – 11:37 am in Consumer Goods, Earnings, Stock Splits,

Suncor Energy Tries Stock Split Game (SU)

Maybe not all companies want to try the "high price stock" game.  Tonight, Suncor Energy Inc. (NYSE: SU) announced it would pursue a two-for-one stock split.  With a price at $102.84 it isn’t too hard to figure out why it would want to split its shares.

If this adjusted instantly we would see a $51.92 price, with twice the number of shares.   Suncor last split its shares in May 2002 and shares have risen nearly 300% since then. Before that, it announced two-for-one stock splits in 2000 and in 1997.  Its U.S. market cap is listed as being $almost $47.6 Billion.

The company does require shareholder approval, which will come up for vote at the April 24, 2008 meeting.  Unless there is some hidden tragedy, you can consider this a shoe-in to be approved by holders.  This was one of the companies that was a beneficiary of last year’s "raised oil super-spike price band" out of Goldman Sachs.

Suncor Energy Inc. is a Canadian integrated energy company operating in Oil Sands, Natural Gas, Energy Marketing and Refining, and Refining and Marketing.  It is headquartered in Calgary, Alberta, and its 52-week trading range is $67.78 to $117.98.  Shares closed flat at $102.84 today on over 2.1 million shares, yet shares are up almost 1% at $103.85 in after-hours. 

Jon C. Ogg
February 27, 2008

Posted on: February 27, 2008 – 5:38 pm in Oil & Gas, Stock Splits, , ,