Cinedigm Announces 1-for-10 Reverse Stock Split10 May, 2016 By: Erik Gruenwedel
Facing possible delisting of its stock, Cinedigm Corp. May 9 announced a 1-for-10 reverse stock split. Each 10 shares of the home entertainment distributor’s Class A common stock will be converted into 1 share of Class A common stock.
The reverse split reduces the total number of shares outstanding from about 78 million to about 7.8 million. Concurrent with the split, the authorized shares of Class A common stock are reduced from 210 million to 21 million.
Cinedigm’s stock, which closed at 21 cents per share, would theoretically increase to $2.10 per share following the reverse split. The Securities Exchange Commission requires a publicly traded company’s stock maintain a $1-per-share valuation. Typically, the delisting process begins when a company’s stock trades for 30 consecutive business days below the minimum $1 bid.
The distributor recently announced that proprietary over-the-top video platforms Dove Channel, CONtv and Docurama have more than two million app downloads and 420,000 registered users. The channels, which are marketed on Amazon Prime’s Streaming Partners Platform, had about 35,000 paid subscribers as of March 31.
“We are thrilled that our three channels have generated such interest and enthusiasm among consumers,” CEO Chris McGurk said in a statement. “CONtv is just over a year old and Dove Channel launched last September, so we believe this early success bodes very well for the growth prospects of all our channels.”