Groupon News: GRPN Stock Tanks 26% on Reverse Stock Split

<p>Groupon (NASDAQ: GRPN) is in the news on Thursday after the GRPN share took a massive dive after a reverse share split.

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Groupon’s reverse share split took effect on Wednesday and was 1 to 20. The goal of the plan was to jump the share price of the share, which has been trading dangerously low since mid-February. GRPN does not risk Nasdaq delisting too low stock prices, so it worked at least in that respect.

Groupon decided to proceed with a reverse share split after consulting investors at its annual general meeting on Tuesday. Shareholders were in favor of the plan and the company’s board approved the following day.

Groupon’s press release notes that the reverse share split affects all shareholders equally. This means that it did not result in any changes in the ownership of the company. The division also does not allow fractions. Instead, these shares are followed and sold again, where the shareholders receive cash payments for their fractions.

It is worth pointing out that even after this reverse share split, investors may not have much faith in the GRPN share. The company has not been able to make a profit for some time now and is expected no earlier than 2024. There is quite a wait for shareholders to start seeing a return on their investment and can warn others away from the stock, reports The Motley Fool.

The GRPN share fell 26.2% as of Thursday afternoon.

At the time of writing, William White had no position in any of the above securities.

Article printed from InvestorPlace Media, https://investorplace.com/2020/06/groupon-reverse-stock-split-news-tanks-grpn-stock/.

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