Orion Energy Systems implements a 10-for-1 reverse stock distribution decision
Orion Energy Systems Announces Reverse Stock Split to Boost Share Price
Orion Energy Systems, a leading provider of energy-efficient LED lighting solutions, has announced a 1-for-10 reverse stock split of its common stock. The move is aimed at increasing the company's share price above the Nasdaq minimum bid price requirement of $1.00 per share, thereby regaining compliance with Nasdaq listing standards.
The reverse stock split, effective from the opening of trading on January 12, 2023, consolidates every 10 shares into 1 share, effectively multiplying the stock price by 10. This strategic corporate action is expected to improve the marketability of the company's common stock and maintain its status on a major exchange.
The purpose of the reverse stock split is to meet the Nasdaq listing rules, which can enhance investor perception and potentially attract institutional investors. Orion Energy Systems' board and shareholders have approved the reverse stock split, which will be in effect from the effective date.
The modification will adjust outstanding equity awards and convertible securities proportionally. Fractional shares resulting from the split will not be issued; holders will receive cash payments equal to the fractional value at the closing price prior to the split. The trading of Orion Energy Systems' common stock on the Nasdaq Capital Market will be on a split-adjusted basis after the effective date.
The reverse stock split is not expected to affect the company's net cash or the number of authorized shares of common stock. Orion Energy Systems' management's proactive action signals a commitment to preserving the company's market presence and may improve key metrics such as earnings per share by reducing shares outstanding.
The reverse stock split of Orion Energy Systems' common stock was undertaken in accordance with Nasdaq Listing Rule 5635(d)(4). The company has announced the effective date for its reverse stock split, which is set for January 12, 2023. Orion Energy Systems' common stock will continue to be traded on the Nasdaq Capital Market following the reverse stock split.
In conclusion, the reverse stock split is a strategic move by Orion Energy Systems to maintain Nasdaq compliance and improve its stock market standing without diluting shareholder value. Shareholders can expect a more concentrated ownership structure and a higher stock price, potentially leading to increased investor interest and a stronger market presence for the company.
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