Cazoo Announces 1-For-100 Reverse Stock Split And Increase In Authorized Share Capital
Portfolio Pulse from Benzinga Newsdesk
Cazoo Group Ltd (NYSE:CZOO) announced a 1-for-100 reverse stock split and an increase in authorized share capital, effective December 5, 2023. The Class A Shares will trade on a split-adjusted basis from December 6, 2023, under the new CUSIP number G2007L 121. The reverse stock split was approved by over 97% of shareholders on November 21, 2023. Fractional shares will not be issued; instead, they will be sold on the open market, and shareholders will receive cash payments. The reverse stock split will proportionately adjust outstanding warrants and equity-based awards, and the number of shares issuable upon exercise of warrants will be reduced accordingly. Cazoo also announced the distribution of New Warrants to Class A shareholders on record as of December 7, 2023, with the distribution date around December 14, 2023.
December 05, 2023 | 1:04 pm
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NEUTRAL IMPACT
Cazoo Group's reverse stock split and share capital increase could lead to a temporary increase in stock price due to perceived value improvement, but may also indicate underlying issues such as trying to meet NYSE listing requirements.
Reverse stock splits often lead to a temporary increase in stock price due to a perceived improvement in the stock's value and compliance with exchange listing requirements. However, they can also be viewed as a sign that a company is struggling to meet these requirements organically. The impact on Cazoo's stock will depend on investor perception of the reasons behind the reverse split and the company's future prospects.
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IMPORTANCE 75
RELEVANCE 100