Chesapeake Energy Corp. Approves a 1-for-200 Reverse Stock Split

Oklahoma City based Chespeake Energy announced on Monday that the company’s board approved a 1-for-200 reverse stock split to bring the company back into compliance with stock-exchange requirements.

The decision came after a special meeting with shareholders and the reverse split will take effect at the end of the business day on Tuesday.

The split-adjusted stock will begin trading on the New York Stock Exchange at the open on Wednesday.

The company’s press release states that “The reverse stock split is intended to, among other things, increase the per share trading price of the Company’s common shares to satisfy the $1.00 minimum bid price requirement for continued listing on the NYSE. As a result of the reverse stock split, each 200 pre-split shares of common stock outstanding will automatically be combined into one issued and outstanding share of common stock without any action on the part of the shareholder. No fractional shares of common stock will be issued as a result of any reverse stock split. Instead, in lieu of any fractional shares to which a shareholder of record would otherwise be entitled as a result of the reverse stock split, the Company will pay cash (without interest) to such shareholder. Once effective, the number of outstanding shares of common stock will be reduced from approximately 1.957 billion as of April 10, 2020 to approximately 9.784 million shares (without giving effect to the liquidation of fractional shares). The total number of shares of common stock that the Company is authorized to issue will also be reduced from 3,000,000,000 to 22,500,000 shares.”

Disclaimer: We have no position in Chesapeake Energy Corporation (NYSE: CHK) and have not been compensated for this article.