Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR), a Maryland-based real estate investment trust, has announced changes to its reverse stock split strategy, as detailed in its latest SEC filing. The company has abandoned its previously disclosed one-for-six reverse stock split in favor of a one-for-five reverse stock split.
The one-for-five reverse stock split will become effective at 5:00 p.m. Eastern Time on June 27, 2024. Consequently, the common stock will trade on a split-adjusted basis on The Nasdaq Capital Market under a new CUSIP number starting from the market open on June 28, 2024. This modification will not alter the number of authorized shares or the company's ticker symbol.
In preparation for the split, Wheeler REIT has submitted the required amendments to its charter to the State Department of Assessments and Taxation of Maryland. These amendments include the one-for-five reverse stock split and a reduction in the par value of common stock from $0.05 to $0.01 per share, effective shortly after the stock split.
Stockholders will not receive fractional shares as a result of the split. Instead, they will be compensated with a cash payment equivalent to the fractional share's value based on the closing price of the common stock on the day of the split.
The reverse stock split will proportionally adjust the outstanding shares of common stock and the company's operating partnership units. It will also affect the conversion rates and prices for the company's convertible securities, including the 7.00% Subordinated Convertible Notes due 2031 and the Series B and D Convertible Preferred Stock.
Adjustments will also be made to the company’s 2015 and 2016 Long-Term Incentive Plans to reflect the reverse stock split. However, the company anticipates that the reverse stock split will result in non-compliance with Nasdaq’s Publicly Held Shares Rule due to a reduced number of publicly held shares. Wheeler REIT expects to receive a notification from Nasdaq and will submit a plan to regain compliance.
This action is part of Wheeler REIT's efforts to meet Nasdaq's minimum bid price requirement. However, if the company fails to comply with the requirement for 30 consecutive business days, it risks a delisting notification from Nasdaq.
The information in this article is based on Wheeler Real Estate Investment Trust's SEC filing.
InvestingPro Insights
As Wheeler Real Estate Investment Trust, Inc. (WHLR) navigates through its strategic decisions, including the recent one-for-five reverse stock split, investors are keeping a keen eye on the company's performance metrics and market behavior. According to InvestingPro data, WHLR holds a market capitalization of 7.8 million USD, reflecting the scale of the company in the financial markets. In the last twelve months as of Q1 2024, WHLR's revenue has grown by 17.09%, indicating a robust increase in the company's earning capacity. This growth is further underlined by a significant gross profit margin of 65.69%, showcasing the company's ability to manage its cost of sales effectively.
Amidst these positive indicators, WHLR's stock has experienced notable price volatility, a factor that potential investors should consider. Moreover, despite the company's liquid assets exceeding short-term obligations, WHLR has not been profitable over the last twelve months, which is a critical consideration for evaluating the company's financial health. Additionally, the stock has seen a substantial return over the last month with a 30.33% price total return, a point of interest for those looking at recent performance.
Investors interested in a deeper dive can explore the full range of InvestingPro Tips for WHLR, which provide further insights into the company's stock behavior and financial standing. For those considering a subscription, remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With several additional tips available on InvestingPro, investors can gain a more comprehensive understanding of WHLR's investment potential.
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