AdvisorShares Announces Reverse Split of ETF
AdvisorShares has announced a 1-for-20 reverse split of the AdvisorShares MSOS Daily Leveraged ETF (MSOX), effective November 26, 2024. The split will reduce outstanding shares by approximately 95% while maintaining shareholders' total investment value. For example, 1,000 shares at $10 NAV ($10,000 total) would become 50 shares at $200 NAV ($10,000 total). The ETF, designed for experienced day traders, aims to provide 2x leveraged exposure. The Fund's CUSIP will change from 00768Y313 to 00768Y289. Fractional shares will be redeemed for cash at the split-adjusted NAV.
AdvisorShares ha annunciato uno split inverso 1-per-20 dell'AdvisorShares MSOS Daily Leveraged ETF (MSOX), efficace dal 26 novembre 2024. Questo split ridurrà le azioni in circolazione di circa il 95%, mantenendo il valore totale dell'investimento per gli azionisti. Ad esempio, 1.000 azioni a $10 NAV (totale $10.000) diventeranno 50 azioni a $200 NAV (totale $10.000). L'ETF, progettato per trader esperti, mira a fornire un'esposizione leva di 2x. Il CUSIP del fondo cambierà da 00768Y313 a 00768Y289. Le azioni frazionarie saranno riscattate in contanti al NAV adeguato allo split.
AdvisorShares ha anunciado un split inverso de 1 por 20 del AdvisorShares MSOS Daily Leveraged ETF (MSOX), con efecto a partir del 26 de noviembre de 2024. Este split reducirá las acciones en circulación en aproximadamente un 95% mientras mantiene el valor total de la inversión de los accionistas. Por ejemplo, 1,000 acciones a $10 NAV (un total de $10,000) se convertirían en 50 acciones a $200 NAV (un total de $10,000). El ETF, diseñado para traders diarios experimentados, tiene como objetivo proporcionar una exposición apalancada de 2x. El CUSIP del fondo cambiará de 00768Y313 a 00768Y289. Las acciones fraccionarias se canjearán por efectivo al NAV ajustado por el split.
AdvisorShares는 AdvisorShares MSOS Daily Leveraged ETF (MSOX)의 1:20 비율의 역 분할을 2024년 11월 26일부터 시행한다고 발표했습니다. 이번 분할로 인해 발행 주식 수는 약 95% 감소하지만 주주들의 총 투자 가치는 유지됩니다. 예를 들어, $10 NAV의 1,000주는 ($10,000 총액) 50주로 바뀌며, 각 주식의 NAV는 $200입니다 ($10,000 총액). 이 ETF는 숙련된 데이 트레이더를 위해 설계되었으며, 2배 레버리지 노출을 제공합니다. 펀드의 CUSIP은 00768Y313에서 00768Y289로 변경됩니다. 분할 조정된 NAV로 유동주식은 현금으로 환불됩니다.
AdvisorShares a annoncé un fractionnement inverse de 1 pour 20 de l'AdvisorShares MSOS Daily Leveraged ETF (MSOX), prenant effet le 26 novembre 2024. Ce fractionnement réduira le nombre d'actions en circulation d'environ 95% tout en maintenant la valeur totale de l'investissement des actionnaires. Par exemple, 1 000 actions à 10 $ de NAV (total de 10 000 $) deviendront 50 actions à 200 $ de NAV (total de 10 000 $). L'ETF, conçu pour les traders expérimentés, vise à fournir une exposition à effet de levier de 2x. Le CUSIP du fonds passera de 00768Y313 à 00768Y289. Les actions fractionnaires seront échangées contre des espèces au NAV ajusté au fractionnement.
AdvisorShares hat einen 1-zu-20 Rückwärtssplit des AdvisorShares MSOS Daily Leveraged ETF (MSOX) angekündigt, der am 26. November 2024 wirksam wird. Der Split wird die ausstehenden Aktien um etwa 95% reduzieren, während der Gesamtwert der Investitionen der Aktionäre erhalten bleibt. Zum Beispiel würden 1.000 Aktien zu einem NAV von 10 $ (insgesamt 10.000 $) in 50 Aktien zu einem NAV von 200 $ (insgesamt 10.000 $) umgewandelt. Der ETF, der für erfahrene Daytrader konzipiert wurde, zielt darauf ab, eine doppelte Hebelwirkung bereitzustellen. Die CUSIP des Fonds wird von 00768Y313 auf 00768Y289 geändert. Bruchteile von Aktien werden zum split-adjustierten NAV in bar eingelöst.
- Maintains shareholders' total investment value despite share consolidation
- May improve trading liquidity through higher per-share price
- 95% reduction in total outstanding shares indicates potential trading volume concerns
- Fractional shares must be redeemed, potentially forcing small cash positions
- Could result in taxable events for shareholders due to fractional share redemptions
Insights
This reverse stock split announcement is a significant structural change for the MSOX ETF. The 1:20 split ratio will reduce outstanding shares by
The timing of this action, coupled with the cannabis sector's recent challenges, suggests defensive positioning. The leveraged nature of this ETF (2x daily exposure) combined with the reverse split could lead to increased volatility and wider bid-ask spreads, potentially impacting trading costs and execution efficiency.
Key operational dates include the November 26, 2024 implementation and CUSIP change from 00768Y313 to 00768Y289. Investors should note potential tax implications from fractional share redemptions and temporary odd-lot unit creation/redemption opportunities.
MSOX has a daily leveraged investment objective and is designed for experienced and sophisticated active day trading investors only. While the investment object is still designed to target two times the exposure the Fund will typically be in range above or below the two times leverage target. This ETF was built to provide more liquidity to these companies in this growing industry, but it's important for investors to remember this ETF is designed only for experienced and sophisticated active day trading investors. Please read the MSOX prospectus for all the risks associated with this ETF.
Effective before market open on November 26, 2024, the Fund will affect a reverse split of its issued and outstanding shares as follows:
Fund Name | Reverse Split Ratio | Approximate decrease in total |
AdvisorShares MSOS Daily Leveraged | 1 for 20 | 95 % |
Please note the CUSIP changes, effective November 26, 2024:
Fund Name | Ticker | Current CUSIP | New CUSIP |
AdvisorShares MSOS Daily | MSOX | 00768Y313 | 00768Y289 |
As a result of this reverse split, every twenty shares of the Fund will be exchanged for one share as indicated above. Accordingly, the total number of the issued and outstanding shares for the Fund will decrease by the approximate percentage indicated above. In addition, the per share net asset value (NAV) and next day's opening market price will be approximately twenty times higher for the Fund. Shares of the Fund will begin trading on the NYSE Arca on a split-adjusted basis on November 26, 2024.
A shareholder's investment value will not be affected by the reverse split. The table below illustrates the effect of a hypothetical one-for-twenty reverse split anticipated for the Fund, as applicable and described above:
1-for-20 Reverse Split
Period | # of Shares Owned | Hypothetical NAV | Total Market Value |
Pre-Split | 1,000 | ||
Post-Split | 50 |
The Trust's transfer agent will notify the Depository Trust Company (DTC) of the reverse split and instruct DTC to adjust each shareholder's investment(s) accordingly. DTC is the registered owner of the Fund's shares and maintains a record of the Fund's record owners.
Redemption of Fractional Shares and Tax Consequences for the Reverse Split
As a result of the reverse split, a shareholder of the Fund's shares potentially could hold a fractional share. However, fractional shares cannot trade on the NYSE Arca. Thus, the Fund will redeem for cash a shareholder's fractional shares at the Fund's split-adjusted NAV as of the Effective Date. A shareholder could recognize a gain or loss in connection with the redemption of the shareholder's fractional shares.
"Odd Lot" Unit
As a result of the reverse split, the Fund may have outstanding one aggregation of less than 5,000 shares to make a creation unit, or an "odd lot unit." Thus, the Fund will provide one authorized participant with a one-time opportunity to redeem the odd lot unit after the split-adjusted NAV is struck on November 26, 2024.
About AdvisorShares
AdvisorShares is a leading provider of actively managed ETFs. For financial professionals and investors requesting more information, call 1-877-843-3831 or visit www.advisorshares.com. Follow @AdvisorShares on X(Twitter) and LinkedIn for more insights.
Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting the Fund's website at www.AdvisorShares.com. Please read the prospectus carefully before you invest.
Foreside Fund Services, LLC, Distributor.
The Fund is an actively managed ETF that seeks to provide investment results that are approximately two times (2x) the daily total return, before fees and expenses, of the US Cannabis ETF, an affiliated ETF, by entering into one or more swaps agreements on the US Cannabis ETF. The Fund does not seek to achieve its stated investment objective for a period of time different than a single day. A single day is measured from the time the Fund calculates its net asset value ("NAV") to the time of the Fund's next NAV calculation. The Fund will enter into one or more swap agreements intended to produce economically-leveraged investment results relative to the returns of the US Cannabis ETF. The Fund may use a combination of swaps on the US Cannabis ETF and swaps on various investment vehicles that are designed to track the performance of the US Cannabis ETF. The Fund expects that cash balances in connection with the use of such financial instruments ("Collateral") will typically be held in money market instruments or other cash equivalents. The Fund is subject to a number of risks that may affect the value of its shares. This section provides additional information about the Fund's principal risks. The degree to which a risk applies to the Fund varies according to its investment allocation. Each investor should review the complete description of the principal risks before investing in the Fund. As with investing in other securities whose prices increase and decrease in market value, you may lose money by investing in the Fund.
Cannabis-Related Company Risk – Cannabis-related companies are subject to various laws and regulations that may differ at the state/local and federal level. These laws and regulations may (i) significantly affect a cannabis-related company's ability to secure financing, (ii) impact the market for marijuana industry sales and services, and (iii) set limitations on marijuana use, production, transportation, and storage. Cannabis-related companies may also be required to secure permits and authorizations from government agencies to cultivate or research marijuana. In addition, cannabis-related companies are subject to the risks associated with the greater agricultural industry, including changes to or trends that affect commodity prices, labor costs, weather conditions, and laws and regulations related to environmental protection, health and safety. Cannabis-related companies may also be subject to risks associated with the biotechnology and pharmaceutical industries. These risks include increased government regulation, the use and enforcement of intellectual property rights and patents, technological change and obsolescence, product liability lawsuits, and the risk that research and development may not necessarily lead to commercially successful products.
Leverage Risk – Leverage is investment exposure that exceeds the initial amount invested. The loss on a leveraged investment may far exceed the Fund's principal amount invested. Leverage may magnify the Fund's gains and losses and, therefore, increase volatility. The use of leverage may result in the Fund having to liquidate holdings when it may not be advantageous to do so.
Shares are bought and sold at market price not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.
A swap agreement is a derivative contract between two parties that involves the exchange of pre-agreed cash flows of two financial instruments.
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SOURCE AdvisorShares
FAQ
What is the reverse split ratio for MSOX ETF announced for November 26, 2024?
How will the MSOX reverse split affect share price and total investment value?
What happens to fractional shares after the MSOX reverse split?
