Philadelphia Pennsylvania Proposal for the Stock Split and Increase in the Authorized Number of Shares
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FAQ
A reverse stock split consolidates the number of existing shares of stock held by shareholders into fewer shares. A reverse stock split does not directly impact a company's value (only its stock price). It can signal a company in distress since it raises the value of otherwise low-priced shares.
An increase in the number of shares of a corporation's stock without a change in the shareholders' equity. Companies often split shares of their stock to make them more affordable to investors. Unlike issuing new shares, a stock split does not dilute the ownership interests of existing shareholders.
What is required should an issuer choose to do a reverse stock split? Generally, a public company can declare a reverse split if it obtains the approval of its board of directors. Most often shareholder approval is not required.
A stock split is a decision by a company's board of directors to increase the number of shares outstanding by issuing more shares to current shareholders. For example, in a 2-for-1 stock split, a shareholder receives an additional share for each share held.
However, in practice, most US companies effect stock splits by issuing stock dividends, because this generally does not require stockholder approval. For information on how to effect a stock split by issuing dividends, see Stock Split Checklist.
A traditional stock split is also known as a forward stock split. A reverse stock split is the opposite of a forward stock split. A company carrying out a reverse stock split decreases the number of its outstanding shares and increases the share price proportionately.
In accordance with the time-frames specified in SEA Rule 10b-17, OTC issuers must provide FINRA with written notice prior to a dividend or any other distribution in cash or in kind, rights or other subscription offerings, forward stock splits, and reverse stock splits.
Reverse stock splits are not governed by the U.S. Securities and Exchange Commission (SEC) like other corporate actions. Generally, the split must be approved by either the board of directors or shareholders, depending on the company's bylaws and state corporate law.
Definition: When a company declares a stock split, the number of shares of that company increases, but the market cap remains the same. Existing shares split, but the underlying value remains the same. As the number of shares increases, price per share goes down.
' Reverse splits are proposed by a firm's board of directors and then must be approved by a vote of shareholders before they can be effected.
