Furniture Brands shareholders OK reverse stock split options
May 7, 2013-- Furniture Today,
ST. LOUIS — Shareholders of Furniture Brands International have approved a pair of options for a reverse stock split that would help keep the company's stock price above $1 and preserve its New York Stock Exchange listing.
The approvals give the board of directors the authority to implement a 1-for-5 or 1-for-7 reverse split anytime prior to the company's next annual meeting in May 2014.
A reverse split reduces the number of outstanding shares and therefore increases the price per share. For example, a 1-for-5 split means a stockholder with 100 shares priced at $1 per share would own 20 shares priced at $5 per share after the split.
New York Stock Exchange rules require a company's stock price to be at least $1per share over 30 consecutive trading days. Furniture Brands stock has traded in the $1 range for several months, and closed Monday at 99 cents per share.
In addition to preserving its NYSE listing, Furniture Brands said a higher share price could also make its stock more attractive to institutional investors and reduce stock price volatility.