MultiPlan Corporation Announces Effective Date of Reverse Stock Split

Rhea-AI Summary

MultiPlan (NYSE: MPLN) has announced a 1-for-40 reverse stock split of its Class A common stock, effective September 20, 2024, at 5:00 p.m. Eastern Time. Trading on a split-adjusted basis will begin on September 23, 2024, under the same NYSE symbol (MPLN) but with a new CUSIP number. This move will reduce the outstanding shares from approximately 658,127,871 to 16,453,197.

The reverse split will also affect warrants, awards under the 2020 Omnibus Incentive Plan, shares available under both the 2020 Omnibus Incentive Plan and 2023 Employee Purchase Plan, and convertible notes. The primary goal is to increase the per share trading price to meet NYSE's continued listing criteria.

Positive

• Potential to meet NYSE's price criteria for continued listing
• Maintains NYSE listing and trading under the same symbol (MPLN)

Negative

• Significant reduction in the number of outstanding shares
• Possible indication of financial challenges or low stock price

Insights

Financial Analyst

MultiPlan's 1-for-40 reverse stock split is a strategic move to maintain NYSE listing compliance. This action will reduce the number of outstanding shares from 658,127,871 to approximately 16,453,197, potentially boosting the stock price by a factor of 40. While this doesn't change the company's fundamental value, it may improve investor perception and liquidity.

The split affects various securities, including warrants, employee stock options and convertible notes, with proportional adjustments to maintain value equivalence. This comprehensive approach ensures fairness across different stakeholders. However, investors should be aware that reverse splits are often seen as a red flag, potentially indicating underlying financial challenges or a struggle to meet listing requirements.

Long-term investors should focus on MultiPlan's operational performance and growth strategies rather than this technical adjustment. The split's success in maintaining NYSE listing and attracting new investors will be important to monitor in the coming months.

Market Research Analyst

The reverse stock split by MultiPlan is a common tactic used by companies facing delisting threats due to low share prices. While it doesn't directly impact the company's market cap, it can have psychological effects on investors. Historically, reverse splits have been associated with struggling companies, which could lead to negative market sentiment.

However, in the healthcare technology sector, where MultiPlan operates, investor focus tends to be on long-term growth potential and technological innovation. The success of this move will largely depend on MultiPlan's ability to demonstrate strong fundamentals and growth in its core business of healthcare cost management and revenue integrity solutions.

Investors should watch for any changes in trading volume and institutional ownership following the split, as these can be indicators of market confidence. Additionally, keep an eye on analyst coverage and any revisions to price targets, which may provide insights into how the market is interpreting this corporate action.

Legal Expert

The reverse stock split announced by MultiPlan is a legally complex process that requires careful execution to ensure compliance with securities laws and NYSE regulations. The company has taken appropriate steps by clearly communicating the effective date, new CUSIP number and the proportional adjustments to various securities.

Of particular note is the comprehensive approach to adjusting not only common stock but also warrants, employee stock options and convertible notes. This demonstrates a thorough consideration of all stakeholders and helps mitigate potential legal challenges related to fairness and equity.

Investors should be aware that while reverse splits are generally viewed negatively, they do not inherently change a company's value or violate any laws when properly executed. However, the company must continue to meet NYSE listing requirements post-split, including maintaining a minimum share price. Failure to do so could result in delisting proceedings, which would have significant legal and financial implications for MultiPlan and its shareholders.

MultiPlan Common Stock Expected to Begin Trading on a Split-adjusted Basis on September 23, 2024

NEW YORK--(BUSINESS WIRE)-- MultiPlan Corporation (“MultiPlan” or the “Company”) (NYSE: MPLN), a leading provider of technology and data-enabled cost management, payment, and revenue integrity solutions to the U.S. health care industry, today announced that it expects a 1-for-40 reverse stock split of its outstanding shares of Class A common stock (the “common stock”) will be effective as of September 20, 2024 at 5:00 p.m. Eastern Time. MultiPlan’s common stock will continue trading on the New York Stock Exchange (“NYSE”) under the existing symbol (MPLN) and will begin trading on a split-adjusted basis when the market opens on September 23, 2024, with the new CUSIP number 62548M209.

As of the effective time of the reverse stock split, each share of common stock will be automatically reclassified into one fortieth (1/40^th) of a share of issued and outstanding common stock. This will reduce the number of shares outstanding from approximately 658,127,871 shares to approximately 16,453,197 shares (in each case, exclusive of treasury shares), subject to adjustment for fractional shares.

The reverse stock split will also result in proportional adjustments being made to: (1) all then-outstanding warrants exercisable for MultiPlan’s common stock, such that fewer shares would underlie such securities and the purchase price per share will be increased; (2) all then-outstanding awards issued under the Company’s 2020 Omnibus Incentive Plan, as amended, such that fewer shares of MultiPlan’s common stock would underlie such awards and the exercise price per share of the options will be increased; (3) the number of shares of MultiPlan’s common stock then-available for issuance under each of the Company’s 2020 Omnibus Incentive Plan, as amended, and the Company’s 2023 Employee Purchase Plan, such that fewer shares will be available for issuance under both plans; and (4) the number of shares of MultiPlan’s common stock issuable upon conversion of the Company’s then-outstanding 6.00% / 7.00% Convertible Senior PIK Toggle Notes due 2027, such that fewer shares would be issuable upon conversion of such notes and the conversion price will be increased.

Continental Stock Transfer & Trust Company is acting as the exchange agent for the reverse stock split. Registered stockholders holding pre-split shares of MultiPlan’s common stock are not required to take any action to receive post-split shares. Stockholders owning shares via a broker, bank, trust or other nominee will have their positions automatically adjusted to reflect the reverse stock split, subject to such broker’s particular processes, and will not be required to take any action in connection with the reverse stock split.

The reverse stock split is primarily intended to increase the per share trading price of MultiPlan’s common stock in order to meet the NYSE’s price criteria for continued listing.

About MultiPlan

MultiPlan is committed to bending the cost curve in healthcare by delivering transparency, fairness, and affordability to the US healthcare system. Our focus is on identifying medical savings, helping to lower out-of- pocket costs, and reducing or eliminating balance billing for healthcare consumers. Leveraging sophisticated technology, data analytics, and a team rich with industry experience, MultiPlan interprets customers’ needs and customizes innovative solutions that combine its payment and revenue integrity, network-based, data and decision science, and analytics-based services. MultiPlan delivers value to more than 700 healthcare payors, over 100,000 employers, 60 million consumers, and 1.4 million contracted providers. For more information, visit multiplan.com.

Forward Looking Statements

This press release contains forward-looking statements. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “forecasts,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts, including the discussion in this press release of the reverse stock split and expected benefits. The forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and speak only as of the date they are made. Any forward-looking statements that we make herein are not guarantees of future performance and actual results may differ materially from those in such forward-looking statements as a result of various factors. Factors that may impact such forward-looking statements also include the factors discussed under “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the three months ended June 30, 2024; and other factors beyond our control. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. The Company’s periodic and other filings are accessible on the SEC’s website at www.sec.gov. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240910942728/en/

Investor Relations

Luke Montgomery, CFA

SVP, Finance & Investor Relations MultiPlan

866-909-7427

investor@multiplan.com

Shawna Gasik

AVP, Investor Relations MultiPlan

866-909-7427

investor@multiplan.com

Media Relations

Pamela Walker

AVP, Marketing & Communication MultiPlan

781-895-3118

press@multiplan.com

Source: MultiPlan Corporation

FAQ

What is the reverse stock split ratio for MultiPlan (MPLN)?

MultiPlan (MPLN) has announced a 1-for-40 reverse stock split of its Class A common stock.

When will MultiPlan's (MPLN) reverse stock split take effect?

The reverse stock split for MultiPlan (MPLN) will be effective as of September 20, 2024, at 5:00 p.m. Eastern Time.

How will the reverse split affect MultiPlan's (MPLN) outstanding shares?

The reverse split will reduce MultiPlan's (MPLN) outstanding shares from approximately 658,127,871 to about 16,453,197, subject to adjustment for fractional shares.

What is the main purpose of MultiPlan's (MPLN) reverse stock split?

The primary purpose of MultiPlan's (MPLN) reverse stock split is to increase the per share trading price to meet NYSE's price criteria for continued listing.