8-K: Wheeler Real Estate Investment Trust Announces One-for-Six Reverse Stock Split

Wheeler Real Estate Investment Trust will implement a one-for-six reverse stock split of its common stock effective June 18, 2024.

Summary

• Wheeler Real Estate Investment Trust is implementing a one-for-six reverse stock split of its common stock.
• The reverse stock split will be effective at 5:00 p.m. Eastern Time on June 18, 2024.
• Following the split, the par value of the common stock will be reduced from $0.06 to $0.01 per share at 5:01 p.m. Eastern Time on June 18, 2024.
• Fractional shares resulting from the split will be paid out in cash based on the closing price of the stock on June 18, 2024.
• The stock will begin trading on a split-adjusted basis on June 20, 2024, under a new CUSIP number 963025861.
• The reverse stock split will not change any particular stockholder's relative ownership percentage, except for minor changes due to cash payments for fractional shares.
• The number of authorized shares of common stock will remain unchanged.
• The conversion rate of the 7.00% subordinated convertible notes due 2031 will be reduced from 8.74 to 1.46 shares per $25.00 principal amount.
• The conversion price of the Series B Convertible Preferred Stock will increase to $57,600 per share of common stock.
• The conversion price of the Series D Cumulative Convertible Preferred Stock will increase to $24,422.40 per share of common stock.
• Adjustments will be made to the number of shares issuable under the company's incentive plans to reflect the reverse stock split.

Sentiment

Score: 5

Explanation: The document is neutral in sentiment as it primarily describes a corporate action (reverse stock split) which is neither inherently positive nor negative. The action is likely to be a result of a low share price which is negative, but the action itself is a standard corporate procedure.

Positives

• The reverse stock split will not change any particular stockholder's relative ownership percentage, except for minor changes due to cash payments for fractional shares.
• The number of authorized shares of common stock will remain unchanged.

Negatives

• The reverse stock split will reduce the number of outstanding shares of common stock.
• The conversion rate of the 7.00% subordinated convertible notes will be reduced.
• The conversion price of the preferred stock will increase significantly.

Risks

• The reverse stock split could potentially impact the trading price of the common stock.
• The company's forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.

Future Outlook

The company has made forward-looking statements regarding the reverse stock split and its potential impact, but these statements are subject to risks and uncertainties.

Management Comments

• The Board of Directors has approved the reverse stock split and par value reduction.
• Management believes the reverse stock split will not affect any particular stockholder's relative ownership percentage, except for minor changes due to cash payments for fractional shares.

Industry Context

Reverse stock splits are often used by companies to increase their stock price and maintain listing requirements on exchanges like Nasdaq. This action is not uncommon in the real estate investment trust sector.

Comparison to Industry Standards

• Reverse stock splits are a common mechanism used by companies, including REITs, to avoid delisting from exchanges when their stock price falls below minimum thresholds.
• Other REITs such as Washington Prime Group and CBL Properties have also implemented reverse stock splits in the past to address low share prices.
• The specific ratio of the reverse stock split (1-for-6) is within the range of what is typically seen in the industry, which can vary from 1-for-2 to 1-for-20 or more.
• The adjustment of conversion rates for convertible securities is a standard practice following a reverse stock split to maintain the economic value of these securities.

Corporate Governance

Stakeholder Impact

• Shareholders will see a reduction in the number of shares they own, but their proportional ownership will remain the same, except for minor changes due to cash payments for fractional shares.
• Holders of convertible securities will see adjustments to their conversion rates and prices.
• The reverse stock split may impact the trading price of the common stock.

Next Steps

• The common stock will begin trading on a split-adjusted basis on June 20, 2024.
• The company will make cash payments in lieu of fractional shares to affected stockholders.

Key Dates

Keywords

reverse stock split, common stock, preferred stock, convertible notes, par value, CUSIP number, Wheeler Real Estate Investment Trust, WHLR, WHLRP, WHLRD, WHLRL