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The Chesapeake reverse share split was revealed by the company on Monday but did not take effect until today. It has the company’s board that adopts a 1-for-200 reverse share split. The transfer is approved by CHK shareholders.
Chesapeake Energy notes that the reason behind the reverse stock split was to increase the value of CHK shares above $ 1. This makes it possible to continue trading on the New York Stock Exchange. The original plan was for a 1-for-50 to 1-for-200 reverse split, with the board choosing the 200 option.
The Chesapeake reverse stock split has reduced its total number of shares from $ 1.957 billion to $ 9.784 million. The measure took place automatically and has shareholders who automatically receive the share’s combined shares.
It is worth pointing out that the company does not allow fractions of shares to exist after a reverse share split. All investors who would own fractions of CHK shares will instead be reimbursed with cash.
The previous closing price for the CHK share before the reverse split was 13 cents. With the split, the new closing price was $ 26.24. Even if it keeps the stock above the $ 1 threshold for NYSE listing, it is already rapidly losing value again.
The CHK share fell 36.05% as of Wednesday afternoon.
At the time of writing, William White had no position in any of the above securities.
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