Travelzoo to Effect Reverse/Forward Split
Really, you're just too much of a bother and a cost for online travel site Travelzoo .
Finally carrying out a plan it announced this past June, Travelzoo said yesterday that, in the next two weeks, it will effect a reverse/forward stock split as a means of shedding small investors who are a drag on account administration costs. That is, assuming that it gets an updated "fairness opinion" approving the maneuver from an independent financial advisor, and the special committee that it set up for the purpose signs off on it.
Under the proposal, Travelzoo will conduct a 1-for-25 reverse stock split or, for every 25 shares of stock you own, you'll get one new one. Any fractional shares will result in a cash payment for the amount. Investors who own less than 25 shares of stock will receive cash only and be effectively booted from ownership in the company.
Immediately after the reverse split happens, Travelzoo will effect a 25-for-1 forward split -- for each share you own, you will get 25 new ones.
When it originally announced the plan at the beginning of the summer, the travel site estimated it would reduce the number of its shareholders from over 90,000, to fewer than 10,000, and now estimates approximately 655,000 of its outstanding shares will be fractionalized. Shareholders approved the transactions at their annual meeting on Sept. 12.
Of course, once the shenanigans are completed, an investor could use the proceeds received to buy back into the stock again.
Shares of Travelzoo closed down today 2.5%, or $0.54, to $20.99.
The article Travelzoo to Effect Reverse/Forward Split originally appeared on Fool.com.Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.