Consistent with the effective date of the previously announced reverse stock split, the stock price of the leading reverse mortgage lender American Financial (FOA) is well above the minimum threshold New York Stock Exchange (New York Stock Exchange) required to maintain trading activity.
As of Friday’s close (the day the reverse stock split took effect), FOA’s stock price jumped from $0.73 at the end of trading on Thursday to $7.19 per share the next morning, roughly equivalent to the company’s 10:1 ratio explained in effective date.
As of 4:00 p.m. ET on Friday, shares were up 3.43% earlier in trading, at about $7.72 per share.
This is the expected impact of the move, according to regulatory filings and company officials interviewed house lineReverse Mortgage Daily (RMD) for the days preceding the effective date.
“[E]”Ten shares of the Company’s issued and outstanding Class A common stock will automatically be reclassified to one issued and outstanding share of the Company’s Class A common stock,” the company explained when announcing the effective date of the move last week. “A reverse stock split will not result in the issuance of fractional shares.”
RMD contacted the FOA for comment, and company representatives referred questions to the new 8-K filing with the FOA. Securities and Exchange Commission (U.S. Securities and Exchange Commission) on Friday.
“All shares of Class A common stock issuable immediately following the effective date of the reverse stock split remain fully paid and non-valuable,” the filing said, and the shares continue to trade on the New York Stock Exchange under the symbol “FOA.”
The split’s “primary effect will be a proportional reduction in the number of outstanding shares of Class A common stock in accordance with a 10:1 reverse stock split,” the document added.
Stocks rebounded overall on Friday, according to report CNNwhich stems from strong corporate performance and the general view that United States Federal Reserve A rate cut could come this fall.
The Dow gained 624 points, or 1.6%, on Friday after surging over 800 points earlier in the session. The S&P 500 rose 1.2% and the Nasdaq gained 1%,” CNN reported.
FOA previously explained in an SEC filing last month that it had taken action to conduct a reverse stock split to bring its share price into compliance with the New York Stock Exchange’s continued listing standards, which require listed shares to maintain a price of at least Shares are $1.
The company explained that it expects the move to “increase the trading price of our Class A common stock to above $1.00 per share” and said it believes it “may make our Class A common stock more attractive to a broader range of institutional investors.” is attractive”. and other investors,” the company said in June when it announced the move.
In December 2023, the company received a notice from the New York Stock Exchange that it did not meet the exchange’s continued listing standards. The FOA said it would return to compliance thereafter, but the NYSE issued a second notice in February 2024.
Earlier this month, the New York Stock Exchange took steps to begin delisting FOA warrants with the stock code “FOA.WS”, but Class A common shares with the stock code “FOA” continue to trade.
Earlier this month, credit rating agencies Fitch announced that its FOA’s Long-Term Issuer Default Rating (IDR) had been downgraded after announcing a debt swap program aimed at hedging maturity risks after 2025.
