- Announcement date: 10 Jul 2020
- Price at time of writing: $1.04
- Lower limit price: $1.48
- Upper limit price: $1.48
- Maximum profit: $439.56
- Expiration date: TBD – subject to AGM
- Westell Press Release: Link
- Filing: Link
Westell Technologies have announced their intention to conduct a 1-for-1000 reverse stock split of their publicly traded (class A) common stock. Holders of fractional shares after the split will have their holdings cashed out at $1.48 per share. A holder of 999 or less shares at the reverse split date can therefore expect to be cashed out at $1.48 (market price at the time of writing is $1.04) per share, provided the transaction goes ahead as indicated in the press release and SEC filing.
The plan is subject to approval at the AGM and expected to complete in late Q3 / early Q4. Insiders holding class B stock have indicated they will vote alongside management, so the transaction is expected to be approved – the controlling shareholders (Penny family) control 53.9% of the voting power of the company’s outstanding stock per their 2019 annual report.
Westell is conducting this transaction to reduce the number of small shareholders on the register prior to delisting from the NASDAQ.
Investors are reminded to conduct their own due diligence and of the usual risks surrounding odd lot arbitrage opportunities, such as changes to proposed corporate actions if they are no longer deemed to be beneficial. In particular, the proposed transaction would apply directly to record holders of the company’s common stock – beneficial owners whose shares are held in “street name” should contact their broker for information on how the transaction will affect shares held for their account.
This was a subscriber suggested special situation, so our thanks to them on behalf of the community. We will cover similar special situations in this section in future.
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