Motor sports equipment wholesaler Duellin the rate will increase 200-fold on Monday, at least in theory. The background is the merging of shares, i.e. a reverse split.
Duell’s general meeting decided last week that every 200 shares will be combined into one share. In this way, the number of shares, which had swelled to more than a billion dollars, will drop to more than five million shares.
The share price should increase by 200 times compared to the previous one, as the arrangement is only technical and should not have a material impact on Duell’s market value. Of course, the board justified the reverse split with more efficient value creation of the share. After Duell’s exchange rate moved around 0.04 euros, a change of just one cent in the exchange rate meant a 25 percent exchange rate fluctuation.
Duell’s share closing price on Friday was EUR 0.039. Thus, the course should open today around 7.80 euros.
Duell had 4,148 Finnish owners at the end of October. The owner did not have to react to the reverse split in any way, and today the investor should avoid rash actions with Duell shares due to the technical change in the price.
Since some of the owners’ shares were not divisible by 200, the company organized a directed share issue in connection with the merger of shares. In Ann, shares were distributed to the owners in such a way that the ownership of all owners was divisible by 200. After that, the company redeemed 199 shares from the owners for every 200 shares in order to cancel the shares to be redeemed. Thus, the number of shares fell to two-tenths of the previous number.
The operation was carried out on Friday after the stock market closed. Trading with the new drastically reduced number of shares starts today, Monday.