The pioneering iBuyer hopes to bring its share price back above the New York Stock Exchange’s $1 minimum threshold.
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With the approval of shareholders, struggling iBuyer Offerpad will execute a reverse stock split Monday in a bid to save the company from being delisted from the New York Stock Exchange.
Offerpad received a noncompliance notice from the exchange on Nov. 15 after the closing price of the company’s shares fell below the required $1 average over a consecutive 30-day trading period.
Shares in Offerpad had briefly surged above $1 in February after the company announced a plan to raise $90 million from existing investors, including CEO Brian Bair, Roberto Sella and First American Financial Corp. But shares in the pioneering iBuyer failed to maintain the minimum $1 average over 30 trading days.
Offerpad’s board of directors announced the 1-for-15 reverse stock split on June 8, the same day investors approved the move at the company’s annual shareholder meeting. After markets close Monday night, every 15 shares of outstanding Offerpad common stock will be automatically converted into one share.
The stock split affects all stockholders uniformly and doesn’t alter any shareholder’s percentage interest in the company. So in theory, at least, each share in Offerpad will be worth about 15 times as much when the New York Stock Exchange opens on Tuesday.
Shares in Offerpad, which over the last year have traded for as little as 37 cents and as much as $3.80, closed at 52 cents Monday, down 19 percent from Friday’s close of 64 cents.
There’s no guarantee that Offerpad’s share price will get a boost from the reverse split that’s exactly proportional to the reduction in outstanding shares. But Monday’s closing price implies that each…