DryShips Inc. DRYS , a well-known shipping company based in Athens, Greece, recently announced its plans of a reverse stock split. Following this, shares of the company lost 32% at the close of trade on Jun 19.
The company's board plans to put into effect a 1-for-5 reverse stock split of its issued common shares. This decision was approved by the board and its shareholders at the company's annual general meeting, held on May 2, 2017.
The reverse stock split will be effective from Jun 22, 2017, following which, the company's shares will be traded on the Nasdaq Capital Market (on a split-adjusted basis) under the same trading symbol. The company's new CUSIP number for the common stock will be Y2109Q 606.
With implementation of the reverse stock split, every five shares of the company's common stock will be combined into one. This will in turn hugely decrease the number of outstanding shares at DryShips from approximately 24.07 million (as of Jun 19, 2017) to 4.8 million.
Under the reverse split, fractional shares will not be issued. However, shareholders with the same will receive a cash payment in lieu thereof at a price equivalent to the fraction multiplied by the closing price of the company's common shares on the Nasdaq Capital Market on Jun 21, 2017.
Shareholders with shares held in book-entry form or through a bank, broker or other nominee will see the impact of this reverse stock split, automatically reflected in their accounts on or after Jun 22.
Whereas, those with shares in the form of certificate are likely to receive instructions from the company's exchange agent, American Stock Transfer & Trust Company, LLC pertaining to the exchange of the old certificates for a new one, representing the reverse stock split.
Shares of DryShips fell over 65% in the last one month, massively underperforming the Zacks Transportation-Shipping industry's loss of 9.14%.
The reverse stock split is expected to boost the company's share price.
We note that the likes of 3TL Technologies Corp. TTM , Great Portland Estates Plc. GPEAF and ArcelorMittal S.A. MT have also recently announced a reverse stock split to boost the stock price. ooking for Stocks with Skyrocketing Upside?
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