Hexo Corp (TSX: HEXO) (NYSE: HEXO) shareholders are undoubtedly celebrating this morning, following the announcement by the company that the proposed share consolidation will be seeing a downward revision. The revision is in light of the recent rise in share price for the company, with the consolidation being a necessity to regain compliance with US$1.00 minimum share price continued listing standard of the NYSE.
In light of recent performance of the equity, management has elected to reduce the consolidation being put into effect from the original 8 to 1 ratio, to that of 4 to 1. As a result, shareholders will receive one new share for every four shares previously held. The company indicates that the reduced consolidation is being used to “maintain a liquid share float and reflect the company’s confidence that it can execute on its growth strategy.”
Commenting on the amendment, CEO Sebastian St-Louis stated, “It is important to maintain liquidity for our investors, and we’ve made the decision to consolidate our shares. This change in the consolidation ratio to 4:1, from the previously announced 8:1, is indicative of the confidence we have in our ability to execute going forward, as we look beyond positive EBITDA to earnings on a per share basis.“
A revised form of proxy will not be sent out by the company given the proxy deadline that takes place on December 9. The current form of proxy also includes discretionary authority with respects to amendments, enabling the current ratio to fall under the current version of the proxy.
The current meeting of shareholders is scheduled for December 11, after which an implementation date for the consolidation, if approved, will be provided.
Hexo Corp last traded at $1.08 on the NYSE.
Information for this briefing was found via Sedar and Hexo Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
