1847 Holdings Announces 1-for-4 Reverse Split

Rhea-AI Summary

1847 Holdings LLC (EFSH) announces a 1-for-4 reverse split of its common shares effective on January 8, 2024, to tighten the public float and attract institutional and other investors. The reverse split will reduce the number of outstanding shares from approximately 3.43 million to 0.86 million and the float from approximately 3.40 million to 0.85 million shares.

Insights

Financial Analyst

A reverse stock split is a strategic move often employed by companies seeking to increase their share price, potentially making the stock more attractive to institutional investors and reducing the volatility associated with lower-priced shares. In the case of 1847 Holdings LLC, the 1-for-4 reverse split will consolidate shares, effectively reducing the total number of outstanding shares and the public float. This typically aims to signal a more mature and stable investment opportunity to the market.

From a financial analysis perspective, this action could be interpreted as a strategic initiative to improve the company's financial ratios, such as earnings per share (EPS), by decreasing the number of shares outstanding. However, it's crucial to evaluate the underlying business fundamentals. If the company's market capitalization remains unchanged, the reverse split does not intrinsically add value. Investors should closely monitor the company's future earnings and the effectiveness of its acquisition strategy to determine if the reverse split correlates with an improvement in business performance.

Moreover, while the reverse split might attract a new investor base, current shareholders might be concerned about the potential for increased share price volatility post-split, as the company will have fewer shares available for trading. It's also worth noting that reverse splits can sometimes be viewed as a red flag, indicating potential financial distress. Therefore, the long-term success of this strategy hinges on the company's ability to execute its business plan and drive shareholder value.

Market Research Analyst

In the context of lower-middle market business acquisitions, 1847 Holdings LLC's reverse split is a strategic maneuver aimed at repositioning the company within the capital markets. The stated goal is to attract a broader universe of institutional investors, which could be due to the perception that these investors prefer to trade in stocks with higher share prices and lower volatility.

Market research indicates that the liquidity and transparency offered by a publicly traded company like 1847 can be appealing to investors seeking exposure to private market investments without the typical illiquidity. The reverse split may enhance this appeal by creating a tighter float, which could lead to a more stable trading environment. However, the reduced number of shares could also result in less liquidity, a factor that must be balanced against the potential benefits.

Additionally, the company's focus on acquiring undervalued, cash flow positive businesses suggests a strategy of growth through acquisition. The success of such a strategy can be contingent on the company's ability to integrate these businesses effectively and realize synergies. Investors should consider how the reverse split fits into the broader context of the company's acquisition strategy and whether it aligns with industry trends towards consolidation in the lower-middle market sector.

Legal Expert

The legal implications of a reverse stock split like the one announced by 1847 Holdings LLC involve a series of regulatory compliance measures. The company must adhere to NYSE American listing requirements, which include maintaining a minimum share price. By reducing the number of outstanding shares, the reverse split is likely aimed at ensuring compliance with these requirements.

It's important for investors to understand that the reverse split does not affect their proportional ownership in the company. However, it does affect the number of shares they own and the share price. Legally, the company must follow strict disclosure and procedural guidelines when executing a reverse split, including amendments to its charter and timely communication with shareholders and the market.

For stakeholders, a key consideration is how the reverse split aligns with the company's stated strategic initiatives and whether it is part of a broader effort to restructure the company's capitalization. The legal processes behind the reverse split are designed to ensure transparency and fairness in these corporate actions, which can have significant impacts on shareholder value.

Reverse Split is a Key Element of Company's Strategic Initiatives as It Prepares for Next Generation of Its Acquisition Financings

NEW YORK, NY / ACCESSWIRE / December 27, 2023 / 1847 Holdings LLC ("1847" or the "Company") (NYSE American:EFSH), a unique holding company that combines the attractive attributes of owning private, lower-middle market businesses with the liquidity and transparency of a publicly traded company, today announced that it will effect a 1-for-4 reverse split ("reverse split") of its common shares that will become effective on January 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 January 8, 2024. The new CUSIP number for the common shares following the reverse split will be 28252B879. The reverse split will reduce the number of outstanding shares of the Company's common shares from approximately 3.43 million shares to approximately 0.86 million shares and also reduce the Company's float from approximately 3.40 million shares to approximately 0.85 million shares.

"We continue to execute on our strategy of acquiring undervalued, cash flow positive, lower-middle market businesses at attractive valuations," stated Ellery W. Roberts, CEO of 1847. "Nevertheless, the overall capital markets remain challenging, and we believe this reverse split will tighten the public float in our stock, enabling us to attract a broader universe of institutional and other investors given the traction in our business. This strategic restructuring as part of the Company's capitalization acknowledges that reality and better positions the Company for our serial accretive acquisitions going forward."

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.

For the latest insights, follow 1847 on Twitter.

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 LLC

View the original press release on accesswire.com

FAQ

What is the strategic initiative announced by 1847 Holdings LLC (EFSH)?

1847 Holdings LLC (EFSH) announced a 1-for-4 reverse split of its common shares effective on January 8, 2024, to tighten the public float and attract institutional and other investors.

When will the reverse split of common shares become effective for 1847 Holdings LLC (EFSH)?

The reverse split of common shares for 1847 Holdings LLC (EFSH) will become effective on January 8, 2024.

What is the impact of the reverse split on the number of outstanding shares for 1847 Holdings LLC (EFSH)?

The reverse split will reduce the number of outstanding shares of 1847 Holdings LLC (EFSH) from approximately 3.43 million shares to approximately 0.86 million shares.

How will the reverse split affect the float of 1847 Holdings LLC (EFSH)?

The reverse split will also reduce the float of 1847 Holdings LLC (EFSH) from approximately 3.40 million shares to approximately 0.85 million shares.

What is the CEO of 1847 Holdings LLC (EFSH) stating about the reverse split?

Ellery W. Roberts, CEO of 1847, stated that the reverse split will tighten the public float in their stock, enabling them to attract a broader universe of institutional and other investors given the traction in their business.