NEW YORK - INNOVATE Corp. (NYSE: VATE), a diversified holding company, has revised the schedule for its upcoming reverse stock split. The company announced that the 1-for-10 reverse stock split, initially set for August 2, 2024, will now take effect after the market closes on August 8, 2024. Trading on a split-adjusted basis is expected to commence on the New York Stock Exchange the following day.
The modification of the effective date is part of INNOVATE's strategy to meet the New York Stock Exchange's minimum per share bid price requirement for continued listing. The decision for the reverse stock split was backed by stockholders during the annual meeting on June 18, 2024.
Following the reverse stock split, every ten shares of INNOVATE's common stock will be consolidated into one new share. This action will prompt proportional adjustments to the exercise prices and the number of shares underlying the company's outstanding equity awards, and the company's equity incentive plans and outstanding convertible securities.
Computershare, Inc., acting as the exchange agent for the reverse stock split, will facilitate the transition for stockholders. Those holding shares in certificated form will need to exchange their certificates, while shares held in electronic book-entry form will automatically be adjusted without the need for stockholder action.
This adjustment aims to enhance the marketability and liquidity of INNOVATE's common stock. The company, which operates in infrastructure, life sciences, and spectrum sectors, employs around 4,000 people across its subsidiaries.
The information regarding the reverse stock split is available in the definitive proxy statement filed with the Securities and Exchange Commission on April 29, 2024, accessible on the SEC's website and INNOVATE's corporate site.
The company cautions that the statements regarding the anticipated effects of the reverse stock split are forward-looking and subject to risks and uncertainties that could cause actual results to differ.
INNOVATE Corp. disclosed mixed Q1 2024 results, with a slight decrease in consolidated total revenue to $315.2 million, down from $317.9 million in the prior year. However, the company's adjusted EBITDA saw a significant increase, rising to $12.8 million from $4.9 million in the previous year.
The broadcasting division, Spectrum, reported revenue growth and increased adjusted EBITDA, driven by network launches and increased demand for its distribution platform. The company anticipates continued growth across its business segments while exploring alternative technologies like ATS 3.0 and 5G broadcasting.
Despite a net loss attributable to common stockholders widening to $17.7 million, INNOVATE Corp. has shown strong year-over-year adjusted EBITDA growth across all segments.
InvestingPro Insights
As INNOVATE Corp. (NYSE: VATE) makes strategic moves with its upcoming reverse stock split, investors have observed the company's performance metrics with keen interest. According to data from InvestingPro, INNOVATE's market capitalization stands at $85.11 million, reflecting the current value investors place on the company. Despite not being profitable over the last twelve months, the stock has experienced a significant return over the last week, with a 30.3% price total return. This surge in price could reflect market reactions to the company's strategic decisions, including the reverse stock split aimed at meeting NYSE's listing requirements.
InvestingPro Tips suggest that INNOVATE's stock generally trades with high price volatility, which can be seen in the stock's price movements over various time frames. Over the last six months, the stock has taken a substantial hit, with a price total return of -34.8%, and it has fallen -59.25% over the last year. These fluctuations indicate a level of risk that investors should consider.
For those looking to delve deeper into INNOVATE's financials and stock performance, additional InvestingPro Tips are available. With an InvestingPro subscription, you can access comprehensive analysis and data that can help guide investment decisions. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. Discover more about INNOVATE Corp. and get the full list of 7 InvestingPro Tips at https://www.investing.com/pro/VATE.
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