LONDON & NEW YORK - Vertical Aerospace Ltd. (NYSE: EVTL), a company specializing in electric aviation, has announced a reverse stock split of its shares. The reverse share split, at a ratio of 1-for-10, was approved by the company's shareholders on Monday and will take effect at the close of business on September 20, 2024.
The reverse stock split aims to boost the company's per-share trading price to satisfy the NYSE's minimum share price requirement. Post-split, the company's ordinary shares will trade under a new CUSIP number, though the ticker symbol will remain unchanged. The company's public warrants will continue to trade under the symbol EVTLW.
As a result of the reverse share split, every ten existing ordinary and preferred shares will be consolidated into one share of the respective class. This action will proportionally reduce the number of authorized ordinary and preferred shares and increase the par value per share in accordance with the reverse share split ratio. Following the reverse split, Vertical Aerospace will be authorized to issue 100 million ordinary shares and 10 million preferred shares, both with a par value of US$0.001 per share.
Shareholders will not receive fractional shares in the reverse split. Instead, fractional shares will be aggregated and sold, with shareholders entitled to a pro rata portion of the net proceeds, minus customary brokerage fees and expenses. The reverse split will affect all shareholders uniformly and will not alter the proportionate voting rights and other rights of the holders of ordinary shares, except for the cash payment in lieu of fractional shares.
The reverse split will also adjust the terms of the company's 2021 Incentive Award Plan, outstanding warrants, convertible notes, and options, with exercise prices and the number of shares issuable being proportionately modified. Public warrants will be adjusted so that ten warrants will be required to purchase one ordinary share, and the exercise price post-split will be $115.00 per share.
Vertical Aerospace is known for its pioneering work in electric aviation, including the development of the VX4, a piloted, four-passenger electric vertical take-off and landing (eVTOL) aircraft. The company has secured 1,500 pre-orders for the VX4, valued at $6 billion.
This news article is based on a press release statement from Vertical Aerospace Ltd.
In other recent news, Vertical Aerospace, a leading player in electric aviation, is set to hold its Annual General Meeting on September 16, 2024, at its Bristol headquarters. The company continues to make strides in the development of its Electric Vertical Take-Off and Landing (eVTOL) aircraft, the VX4. Canaccord Genuity has adjusted Vertical Aerospace's price target from $1.75 to $1.50, maintaining a Buy rating, despite uncertainties around equity investments. The firm anticipates a capital raise of around £340 million.
Recent developments include the extension of Vertical Aerospace's Design Organisation Approval (DOA) by the UK Civil Aviation Authority (CAA), enabling a broader oversight of technical compliance areas. The company has also secured 1,500 pre-orders for the VX4, valued at approximately $6 billion.
The company is progressing in testing its VX4 aircraft, which has shown a 20% improvement in power-to-weight ratio over its predecessor. The financial status of Vertical Aerospace remains robust, with an estimated cash balance of $84 million as of June 2024. The company's recent advancements reflect its commitment to leading in the electric aviation industry and its pursuit of sustainable transportation solutions.
InvestingPro Insights
Vertical Aerospace Ltd. (NYSE: EVTL) has been navigating challenging financial waters as reflected in their recent metrics. The company's market capitalization stands at $199.12 million, which offers a glimpse into its size and market value. However, a deeper dive into the company's financial health shows an adjusted P/E ratio for the last twelve months as of Q4 2023 at -2.55, underscoring that investors are facing losses per share. Additionally, the company's operating income, adjusted for the same period, was significantly negative at -$129.96 million, indicating substantial operational costs relative to its revenue.
Looking at the stock's performance, Vertical Aerospace has experienced a significant return over the last week with a 22.76% increase in price total return. This short-term uptick is part of a broader pattern of strong returns over the last three months, at 22.93%, and an even more impressive 41.88% over the last six months. These figures suggest a recent surge in investor confidence or speculative interest, despite the company’s financial challenges.
InvestingPro Tips highlight that while Vertical Aerospace has liquid assets that exceed its short-term obligations, indicating a degree of financial flexibility, the company is quickly burning through cash and suffers from weak gross profit margins. Furthermore, analysts do not anticipate the company will be profitable this year, and net income is expected to drop. For readers interested in a more comprehensive analysis, there are additional InvestingPro Tips available, which can provide further insights into Vertical Aerospace's financial position and future prospects.
For those closely following Vertical Aerospace's financial trajectory and stock performance, it's worth noting that the company does not pay a dividend to shareholders, which could be a consideration for income-focused investors. With these insights in mind, stakeholders and potential investors can better assess the implications of the company's reverse stock split and its broader financial strategy.
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