1847 Holdings Announces 1-for-13 Reverse Split
1847 Holdings announced a 1-for-13 reverse stock split of its common shares, effective July 8, 2024. The company's shares will continue trading on NYSE American under the symbol 'EFSH'. The reverse split will reduce the number of outstanding shares from around 7.1 million to approximately 0.54 million, and the float from about 6.8 million to 0.53 million. CEO Ellery W. Roberts emphasized that this move aims to better position 1847 Holdings for future acquisitions and improve stock attractiveness to institutional investors. The new CUSIP number post-split will be 28252B861.
- 1847 Holdings will reduce the number of outstanding shares from 7.1 million to 0.54 million.
- The float will decrease from 6.8 million shares to 0.53 million shares, potentially increasing stock stability.
- The reverse split could make shares more appealing to institutional investors.
- This move aims to provide financial flexibility for future acquisitions.
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Insights
Reverse stock splits are a common corporate action where a company reduces the total number of its shares outstanding, which in turn increases the share price proportionally. In 1847 Holdings' case, the 1-for-13 split means that every 13 shares of existing stock will be converted into one new share.
This move can have various motivations. Often, companies undertake reverse splits to increase their share price to meet listing requirements of major exchanges or to make their stock more attractive to institutional investors. For 1847 Holdings, reducing the number of shares from approximately 7.1 million to 0.54 million boosts the per-share price, which may help the company avoid delisting from the NYSE American if the stock price was approaching a critical low threshold.
However, reverse splits can have mixed implications for retail investors. While a higher share price can attract institutional investors and potentially increase liquidity, it does not change the fundamental value of the company. One potential downside is that it might signal management's concern about the stock's performance, which could negatively impact investor sentiment. Additionally, the reduced float might increase stock volatility, as fewer shares in the market can lead to larger price swings in response to trades.
For 1847 Holdings, robust communication regarding their growth strategies and acquisition plans will be important in maintaining investor confidence. The real value will depend on whether the company can effectively utilize this financial restructuring to drive future growth and profitability.
From a market perspective, a reverse stock split often aims to enhance the visibility and credibility of a company's shares. By tightening the public float, 1847 Holdings is likely seeking to appeal to a broader range of institutional investors who might have specific price thresholds for investment. Institutional investors often prefer stocks that are less volatile and have a higher price per share, as these criteria can be associated with lower risk.
However, the market's reception to reverse splits can vary. In some cases, the market may view it as a positive move, interpreting it as a sign that the company is taking steps to stabilize its stock and implement strategic growth initiatives. In other cases, it might be seen as a response to a declining share price, which could raise concerns about the underlying health of the business.
The company's focus on acquiring undervalued, cash flow-positive businesses remains a critical factor. If 1847 Holdings can demonstrate success in these acquisitions and show strong financial performance post-split, it can help offset any initial skepticism and potentially drive the stock price higher over the long term. Clarity on how the reverse split aligns with their broader acquisition and growth strategy will be vital in managing market expectations and fostering a positive investor outlook.
NEW YORK, NY / ACCESSWIRE / June 27, 2024 / 1847 Holdings LLC ("1847" or the "Company") (NYSE American:EFSH), a holding company specializing in identifying over-looked, deep value investment opportunities in middle market businesses, today announced that it will effect a 1-for-13 reverse split ("reverse split") of its common shares that will become effective on July 8, 2024.
1847's common shares will continue to trade on NYSE American under the symbol "EFSH" and will begin trading on a split-adjusted basis when the market opens on July 8, 2024. The new CUSIP number for the common shares following the reverse split will be 28252B861. The reverse split will reduce the number of outstanding shares of the Company's common shares from approximately 7.1 million shares to approximately 0.54 million shares and also reduce the Company's float from approximately 6.8 million shares to approximately 0.53 million shares.
Ellery W. Roberts, CEO of 1847, stated, "We believe this strategic restructuring of the Company's capitalization better positions us for the ongoing serial accretive acquisitions we have in the pipeline. Our focus remains on acquiring undervalued, cash flow-positive, lower-middle market businesses at attractive valuations. By restructuring, we are ensuring that we have the necessary financial flexibility and strength to continue pursuing these opportunities effectively."
"Despite the challenging overall capital markets, we are confident that this reverse split will tighten the public float of our stock. This adjustment will enhance the stock's attractiveness to a broader range of institutional and other investors. By making our shares more appealing to these investors, we aim to increase liquidity and stabilize our stock price, which is crucial for maintaining investor confidence and supporting our growth strategy. Furthermore, the traction in our business demonstrates our ability to deliver consistent value and performance. The reverse split is a strategic move that aligns with our long-term vision, providing us with a stronger platform to execute our growth initiatives and capitalize on market opportunities. We believe that this approach will ultimately create more value for our shareholders and position the Company for sustained success in the future," concluded Mr. Roberts.
About 1847 Holdings LLC
1847 Holdings LLC (NYSE American: EFSH), a publicly traded diversified acquisition holding company, was founded by Ellery W. Roberts, a former partner of Parallel Investment Partners, Saunders Karp & Megrue, and Principal of Lazard Freres Strategic Realty Investors. 1847 Holdings' investment thesis is that capital market inefficiencies have left the founders and/or stakeholders of many small business enterprises or lower-middle market businesses with limited exit options despite the intrinsic value of their business. Given this dynamic, 1847 Holdings can consistently acquire businesses it views as "solid" for reasonable multiples of cash flow and then deploy resources to strengthen the infrastructure and systems of those businesses in order to improve operations. These improvements may lead to a sale or IPO of an operating subsidiary at higher valuations than the purchase price and/or alternatively, an operating subsidiary may be held in perpetuity and contribute to 1847 Holdings' ability to pay regular and special dividends to shareholders. For more information, visit www.1847holdings.com.
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Forward-Looking Statements
This press release may contain information about 1847 Holdings' view of its future expectations, plans and prospects that constitute forward-looking statements. All forward-looking statements are based on our management's beliefs, assumptions and expectations of our future economic performance, taking into account the information currently available to it. These statements are not statements of historical fact. Forward-looking statements are subject to a number of factors, risks and uncertainties, some of which are not currently known to us, that may cause our actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial position. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include but are not limited to the risks set forth in "Risk Factors" included in our SEC filings.
Contact:
Crescendo Communications, LLC
Tel: +1 (212) 671-1020
Email: EFSH@crescendo-ir.com
SOURCE: 1847 Holdings
View the original press release on accesswire.com
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