RE: Share Consolidation16 Nov 2018 09:52
Morning Sakha, and every one else.
Share Consolidation, also known as “Reverse Stock Split”, is an exercise undertaken by the company to reduce the total number of shares in issue while simultaneously increasing the nominal or par value of each share.
In a Share Consolidation exercise, the number of consolidated shares which existing shareholders are entitled to is in proportion to their existing shareholdings. After this exercise, they will own fewer but proportionately higher priced shares due to the reduction in the number of shares in issue. Thus, Share Consolidation has no effect on the value of the individual shareholder’s overall shareholdings relative to the total market valuation of the company.
Companies pursue Share Consolidation primarily to increase the company’s share price so as to generate greater interest in the company’s shares, in particular from institutional investors who may have a mandate to only invest in shares above a certain price point.
Another reason for Share Consolidation would be for companies to meet the minimum trading bid size to ensure its listing status on the stock exchange.
Cant comment on if its going to be good or bad, other than we have Zorbas running the show, so make of that what you will
GLA