MacKenzie Announces 1-for-10 Reverse Stock Split to Maintain Nasdaq Listing
MacKenzie Realty Capital Inc. (Nasdaq:MKZR) announced that its board of directors approved a 1-for-10 reverse stock split. The decision is primarily aimed at increasing the per-share trading price of the company’s common stock to ensure continued compliance with the Nasdaq Capital Market’s minimum bid price requirement.
Filings reveal that the company received a bid price deficiency notice on July 7, and though the letter has no immediate effect on the listing of the company’s common stock, it has 180 calendar days to regain compliance.
According to MacKenzie, the reverse stock split will reduce the number of outstanding shares and proportionately increase the share price without changing the total market value of the company.
Currently, MacKenzie has approximately 15,781,929.80 shares of common stock outstanding. Following the 1-for-10 reverse stock split, this number will be reduced to approximately 1,578,192 shares. Proportional adjustments will also be made to the exercise prices of the company’s outstanding stock warrants.
To address fractional shares, stockholders who would otherwise be entitled to receive less than one whole new share will receive a cash payment. This payment will be calculated based on the applicable fraction multiplied by the closing price of the company’s common stock on the Nasdaq Capital Market immediately prior to the split, adjusted for the reverse stock split, and without any interest.
MacKenzie has clarified that stockholders of record are not required to take any action to receive their post-split shares, which will be held in book-entry form. Similarly, stockholders holding shares through a bank, broker, custodian, or other nominee will see their positions automatically adjusted, though they are encouraged to contact their respective holding entities for specific procedural details.
The effective date for the reverse stock split has not yet been finalized but will be announced by the company at least two business days prior to its implementation.
MacKenzie Realty Capital, founded in 2013, operates as a West Coast-focused real estate investment trust. The company’s strategy involves investing at least 80% of its total assets in real property, with a target allocation of approximately 50% multifamily and 50% boutique Class A office properties. Up to 20% of its total assets may be invested in illiquid real estate securities.
The REIT’s current portfolio includes interests in four multifamily properties, eight office properties, and two multifamily developments.
This reverse stock split is a common corporate action for companies seeking to maintain their listing on major exchanges like Nasdaq, which often have minimum bid price requirements to ensure a certain level of trading integrity and investor perception.
Previously a publicly registered non-traded REIT, MacKenzie listed on the Nasdaq on Nov. 11, 2024, after working with the national securities exchange on its application.
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