What happens to face value after reverse stock split?

A reverse stock split has no inherent effect on the company's value, with market capitalization remaining the same after it's executed. This path is usually pursued to prevent a stock from being delisted or to improve a company's image and visibility.

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Travis Texas Proposal to amend certificate to reduce par value, increase authorized common stock and reverse stock split with Exhibit

Name: Travis Texas Proposal to amend certificate to reduce par value, increase authorized common stock and reverse stock split with Exhibit
Brand: US Legal Forms
Rating: 4.62 (410 reviews)

Category:

Corporations - Public - Changes Affecting Capital Stock

State:

Multi-State

County:

Travis

Control #:

US-CC-3-213F

Format:

Instant download

Description

This sample form, a detailed Proposal to Amend Certificate to Reduce Par Value, Increase Authorized Common Stock and Reverse Stock Split w/Exhibit document, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats.

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How to fill out Travis Texas Proposal To Amend Certificate To Reduce Par Value, Increase Authorized Common Stock And Reverse Stock Split With Exhibit?

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FAQ

Immediately after the reverse split, the stock price will rise tenfold to $10 per share. That will leave your smaller position still worth the same amount since 100 shares multiplied by $10 per share equals $1,000.

Although the SEC has authority over a broad range of corporate activity, state corporate law and a company's articles of incorporation and by-laws generally govern the company's ability to declare a reverse stock split and whether shareholder approval is required.

Key Takeaways A company performs a reverse stock split to boost its stock price by decreasing the number of shares outstanding. A reverse stock split has no inherent effect on the company's value, with market capitalization remaining the same after it's executed.

Generally, the split must be approved by either the board of directors or shareholders, depending on the company's bylaws and state corporate law. Public companies that file with the SEC can notify shareholders about an upcoming reverse stock split with a proxy statement on forms 8-K, 10-Q, or 10-K.

Will the reverse stock split change the par value of the share? Yes, the par value of each share will be increased proportionally to the exchange ratio, i.e. it will be multiplied by 20.

Laws vary state to state, but generally speaking, any change to par value typically involves an amendment to your corporate charter (your Articles of Incorporation, or whatever the formation document is called in your state). The easiest change to make is probably switching from no par value to par value shares.

A reverse stock split occurs when a publicly traded company divides the number of outstanding shares by a certain amount. This serves to decrease the number of outstanding shares and increase the price per share of those outstanding shares.

When a company's stock splits, the change in the par value is offset by a corresponding change in the number of shares so the total par value remains the same. The total stockholders' equity is unaffected by the stock split and no entries are recorded.

A reverse stock split has no inherent effect on the company's value, with market capitalization remaining the same after it's executed. This path is usually pursued to prevent a stock from being delisted or to improve a company's image and visibility.

What is required should an issuer choose to do a reverse stock split? Generally, a public company can declare a reverse split if it obtains the approval of its board of directors. Most often shareholder approval is not required.

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Offering Price(1), Amount of. 0001 par value. KMPH.You should read this prospectus and any prospectus supplement or amendment carefully before you invest in our securities. Per Share(1). Proposed. Maximum. Aggregate. Offering. Price(1)(2).

Travis Texas Proposal to amend certificate to reduce par value, increase authorized common stock and reverse stock split with Exhibit

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