Chesapeake Energy Corporation shareholders vote Monday on the company’s proposed reverse stock split. The company needs shareholder approval before it can move ahead with the financial move that comes as company stock is down 80% year to date.
The board of directors called for the reverse stock split as a means to increase the per share trading price so the company can meet the $1 a share minimum requirement to be traded on the New York Stock Exchange. Chesapeake faces delisting if it cannot improve the value of its stock on the exchange.
If shareholder approval is obtained, the final ratio will be determined by the Company’s Board of Directors. If approved, the reverse stock split is expected to become effective at 5:00 p.m., Central Time, on April 14, 2020, and the shares will begin trading on the split-adjusted basis on The New York Stock Exchange (“NYSE”) under the Company’s existing trading symbol “CHK” on April 15, 2020.
The reverse stock split proposal includes a proposed reverse stock split ratio within a range between and including one-for-fifty (1:50) and one-for-two-hundred (1:200). If shareholder approval is obtained, the final ratio will be determined by the Company’s Board of Directors.
As a result of the reverse stock split, every 50 to 200 (as determined by the Company’s Board of Directors) shares of the Company’s common stock will automatically combine into one share, and the number of shares of common stock outstanding will be reduced. If approved, the Company’s total number of authorized shares of common stock will be reduced as determined by a formula based on two-thirds of the applicable reverse stock split ratio.