Shares of Turnaround Letter-recommended Toshiba Corporation (OTC: TOSYY) were split 1.20 to 1 on October 3, 2018. This note outlines the moderately complex math behind the split. TOSYY is a depositary receipt (“DR”) that is essentially the same as an ADR.
For investors that held TOSYY prior to October 3rd:
- For every one share of TOSYY previously held, holders will now hold 1.2 TOSYY shares. Any fractional ordinary share distributions will be made in cash.
For investors that purchased TOSYY after October 3rd:
- No change in the number of TOSYY shares as holders are unaffected by the change.
Details on the split:
The split in TOSYY was the result of a 1:10 (one for ten) reverse split in the Toshiba Corporation ordinary shares:
Old ratio 1 ADR share = 6.0 ordinary shares
Effect of 1:10 reverse split 1 ADR share = 0.6 ordinary shares
… stated another way 2 ADR shares = 1.2 ordinary shares
Additional distribution for
each ADR held 0.2 ordinary shares
New ratio 2 ADR shares = 1.0 ordinary shares
We continue to rate shares of Toshiba Corporation (TOSYY) a BUY up to 28.
Disclosure Note: An employee of the Publisher owns TOSYY shares.