DALLAS - Beneficient Company Group L.P. (Nasdaq: BENF), a firm offering liquidity solutions for alternative asset holders, has announced a 1-for-80 reverse stock split of its Class A and Class B common stock.
This corporate action, approved by shareholders on March 21, 2024, is set to take effect on Thursday, April 18, 2024, with the aim of complying with Nasdaq's minimum bid price requirement for continued listing.
The reverse stock split will consolidate every 80 shares of issued and outstanding common stock into one share. Consequently, the number of Beneficient's issued and outstanding shares is expected to decrease from approximately 287.87 million to 3.6 million post-split. The equity awards, warrants, and convertible preferred stock will also see a proportional reduction in shares issuable and an increase in the exercise or conversion price per share. The par value and other terms of the common stock remain unchanged.
Additionally, the reverse split will proportionally reduce the number of authorized shares of Class A and Class B common stock from 1.5 billion and 20 million to 18.75 million and 250,000, respectively. No fractional shares will be issued; instead, shareholders entitled to a fraction of a share will receive one whole share of common stock.
Beneficient's transfer agent, Continental Stock Transfer & Trust Co., will handle the book-entry records for the common stock. Stockholders holding pre-split shares in book-entry form do not need to take any action, while those holding shares through brokers or other nominees will see their holdings automatically adjusted.
This move is part of Beneficient's strategy to regain compliance with Nasdaq's listing standards, specifically the minimum bid price rule. The company's definitive proxy statement filed with the Securities and Exchange Commission on March 11, 2024, contains additional details about the reverse stock split.
Beneficient, also known as Ben, operates the AltAccess platform, which aims to democratize the alternative asset investment market by offering liquidity solutions to mid-to-high net worth individuals and small-to-midsized institutions. The company's subsidiary, Beneficient Fiduciary Financial, L.L.C., operates under regulatory oversight in Kansas.
This news is based on a press release statement from Beneficient.
InvestingPro Insights
As Beneficient Company Group L.P. (Nasdaq: BENF) navigates its way through a reverse stock split to meet Nasdaq's listing requirements, investors are looking closely at the company's financial health and market performance. With a market capitalization of just $25.24 million and a history of significant price volatility, BENF's stock has been under considerable pressure.
An InvestingPro Tip points out that Beneficient has been quickly burning through cash, which is a critical factor for investors to consider, especially when the company is not profitable over the last twelve months. This financial situation is reflected in the company's negative P/E ratio of -0.007, indicating that investors are currently unable to gauge the company's value based on earnings.
Moreover, the stock has experienced a sharp decline in its price, with a 1-month price total return showing a rare uptick of 17.23%, which contrasts sharply with a 3-month price total return of -79.12% and a 6-month price total return of -91.33%. These figures underscore the high price volatility and the stock's tendency to move in the opposite direction of the market, as highlighted in another InvestingPro Tip.
For those interested in a deeper analysis, there are additional InvestingPro Tips available that discuss aspects such as the company's short-term obligations exceeding its liquid assets and its poor free cash flow yield. These insights could be particularly valuable for understanding the potential risks and opportunities associated with BENF's stock. To access these tips and more, visit InvestingPro and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Investors following Beneficient's reverse stock split and its efforts to comply with Nasdaq's requirements will find that the company's financials and market performance are key areas to watch. With the InvestingPro platform offering a wealth of additional tips, now is an opportune time to gain a comprehensive understanding of BENF's investment profile.
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