Hexo (NYSE:HEXO), a cannabis company based out of Canada, has announced plans for a reverse stock split.
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Here’s what investors in HEXO .
- The company wants to consolidate down eight shares of HEXO stock into a single share.
- The goal of this reverse stock split is to push shares of HEXO stock above $1 each.
- That’s because the New York Stock Exchange doesn’t allow shares that trade below an average of $1 for a 30-day period.
- Hexo definitely meets that criteria as its stock hasn’t traded above the $1 minimum since markets closed on June 12.
- The company believes it’s in the best interest to continue trading on the NYSE and says consolidation is the easiest way to regain compliance.
- Hexo will need shareholder approval before it can move forward with the reverse stock split plan.
- It intends to hold a special meeting on Dec. 11, 2020, to have investors in HEXO stock vote on the consolidation plan.
- The company will also need approval from the NYSE and Toronto Stock Exchange before the reverse stock split can take place.
- So long as there are no issues, Hexo says it plans to have the consolidation of shares take place shortly after its meeting with investors.
- The plan will have its total number of outstanding shares dropping from 483,445,248 to 60,430,656.
- Hexo also notes that the plan won’t allow for fractional shares of its stock.
- Instead, those shares will be rounded up or down depending on if they are greater or less than .5 shares.
HEXO stock was down 63.8% as of noon Friday.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
