DALLAS – Beneficient Company Group LP (Nasdaq: BENF), a provider of liquidity solutions to alternative asset holders, announced an 80-1 reverse stock split of its Class A common stock and Class B common stock.
The corporate action was approved by shareholders on March 21, 2024 and is expected to become effective on Thursday, April 18, 2024, for the purpose of complying with minimum bid price requirements for continued listing on Nasdaq.
Through the stock consolidation, 80 outstanding common shares will be consolidated into 1 share. As a result, the number of Beneficient's outstanding shares after the split is expected to decrease from approximately 287.87 million shares to 3.6 million shares. Stock-based compensation, stock options, and convertible preferred stock will also result in a proportionate reduction in the number of shares issuable and an increase in the exercise price or conversion price per share. The par value and other terms of the common stock will not change.
Additionally, as a result of the reverse stock split, the number of authorized shares of Class A common stock and Class B common stock will be proportionately reduced from 1.5 billion shares and 20 million shares to 18.75 million shares and 250,000 shares, respectively. Fractional shares will not be issued. Instead, shareholders entitled to a fractional share will receive one entire common share.
Beneficient's transfer agent, Continental Stock Transfer & Trust, Inc., will process the recording of the transfer of the common stock. Shareholders who hold pre-split shares in book-entry form do not need to do anything, but shareholders who hold shares through a securities company or other designated agent will have their holdings automatically adjusted.
The move is part of Beneficient's strategy to regain compliance with Nasdaq's listing standards, particularly the minimum bid price rule. The company's final proxy statement, filed with the Securities and Exchange Commission on March 11, 2024, contains additional details regarding the reverse stock split.
Beneficient, also known as Ben, operates the AltAccess platform, which aims to democratize the alternative asset investment market by providing liquidity solutions to high-net-worth individuals and small- to medium-sized institutions. His Beneficient Fiduciary Financial, LLC, a subsidiary of the firm, operates under Kansas regulatory oversight.
This news is based on a press release from Beneficient.
Investment Pro Insights
Investors are keeping an eye on Beneficient Company Group LP (Nasdaq: BENF)'s financial health and market performance as it moves forward with a reverse stock split to meet Nasdaq listing requirements. BENF has a market capitalization of just $25.24 million, and the stock has been under considerable pressure due to significant price fluctuations in the past.
Ann investment pro tips Beneficient is burning through cash rapidly, and notes that this is an important factor for investors to consider, especially if it hasn't made a profit in the past 12 months. This financial position is reflected in the company's negative P/E ratio of -0.007, indicating that investors cannot currently gauge the company's value based on earnings.
Moreover, the stock has experienced a sharp decline in price, with the 1-month total price return showing a rare increase of 17.23%, compared to the 3-month total price return of -79.12% and the 6-month total price return of -79.12%. This is in sharp contrast to the stock price. Total return is -91.33%. These numbers highlight the high price volatility and the tendency for stock prices to move in the opposite direction to the market, as highlighted in another article. investment pro tips.
Additional information is available if you are interested in a more detailed analysis. investment pro tips Documents are available that discuss the company's short-term debt exceeding its current assets and low free cash flow yield. We believe these insights are particularly valuable in understanding the potential risks and opportunities associated with BENF stock. To access these tips and more, visit InvestingPro and consider using a coupon code. pro news 24 Get an extra 10% off annual or biennial Pro and Pro+ subscriptions.
Investors following Beneficient's reverse stock split and efforts to comply with Nasdaq requirements will find that the company's financial condition and market performance are key areas to watch. Now is the perfect time to get a comprehensive understanding of his BENF investment profile, as the InvestingPro platform offers a wealth of additional tips.
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