Menomonee Falls-based Magnetek Inc. announced that its board of directors has approved a 1-for-10 reverse split of its common stock.
In a reverse stock split, a company reduces the total number of shares outstanding in the market, which in turn increases the new value of each individual share price.
Magnetek will enact a reverse stock split of its common stock at any whole number ratio between 1-for-2 and 1-for-10.
Magnetek currently intends for the reverse stock split to become effective after the close of trading on Friday, Dec. 2, 2011. The company’s common stock is expected to begin trading on a split adjusted basis on the New York Stock Exchange (NYSE) at the opening of trading on Monday, Dec. 5, 2011, subject to the final determination of the NYSE. Magneteks common stock will continue trading on the NYSE under its ticker symbol MAG, but the Company will trade under a new CUSIP number.
The reverse stock split is a first step toward regaining compliance with the $1 minimum share price requirement of the NYSE. Had Magnetek not taken action, it faced being delisted by the stock exchange.
The NYSE standard requires a minimum average closing price of $1.00 per share over 30 consecutive trading days.
