Eagle Bulk Shipping Inc. (NASDAQ: EGLE) has made good its promise to consolidate its shares through a reverse stock split. As an investor or prospective investor in Eagle Bulk, there are a few things you would want to keep in mind: What changes with the reverse stock split transaction? What does the transaction mean to the company’s future?
Eagle Bulk Shipping Inc. (NASDAQ: EGLE) affected a 1-for-20 reverse stock split. That ensured that 20 shares of the company’s common stock were combined into one share with the value of 20 shares before the split transaction.
The company did not issue fractional shares. In that case, shareholders whose stakes weren’t evenly divisible by 20 received cash payment on would-be fractional shares.
The reverse stock split has significantly reduced Eagle Bulk’s outstanding share count. The company announced that the number of its outstanding shares have dropped to about 18.8 million following the reverse stock split. The company had about 376.1 million shares before the stock split transaction.
The transaction has also helped Eagle Bulk Shipping Inc (NASDAQ: EGLE) to raise the trading price of its shares.
How does it impact the future?
The reverse stock split has enabled Eagle Bulk to come into compliance with the requirement for continued listing on the NASDAQ Global Select Market. A company is required to maintain a minimum bid price of $1 on its stock to ensure continued listing.
But the reduction in outstanding shares without corresponding reduction in authorized shares seems to create more room to dilute the stock of Eagle Bulk. However, it could also mean ample room to raise more capital in the future through equity issuance.
2Q2016 earnings – Eagle Bulk Shipping Inc. (NASDAQ: EGLE)
Eagle Bulk Shipping Inc. (NASDAQ: EGLE) is set to release its 2Q2016 earnings on August 8. In the last quarter, the company generated net revenue of $21.3 million, which declined from $26.3 million in the comparable quarter a year ago. Eagle Bulk posted adjusted EPS loss of $0.73 in the last quarter.