On Thursday, Synovus Financial Corp. (SNV) announced plans for a one-for-seven reverse stock split of its common shares. Investors weren’t enthusiastic about the news, sending SNV stock down about 1% in Friday morning trading.
Slightly less than 90% of the regional bank holding company’s shareholders voted to authorize the one-for-seven reverse stock split of Synovus stock. By a similar margin, they also approved a proposal to increase the number of authorized shares of Synovus’ common stock from 1.2 billion shares to 2.4 billion shares. SNV quickly announced that the one-for-seven stock split will occur on May 16. SNV shares will start trading on a “post-split basis” on May 19, the Ledger-Enquirer motes.
SNV is hoping the reverse stock split, which will raise the price of its common shares, will make Synovus stock more appealing to mutual funds and other institutional investors, who will not invest in stocks priced under $5 a share. The reverse stock split will reduce the number of existing SNV shares from 2.4 billion to less than 343 million.
Though shareholders have approved a increase in the number of authorized shares, SNV says it has no current plans to issue new stock. “We want shares available if the company should need them,” CEO Kessel Stelling said.
Synovus Stock closed at $3.28 per share on Thursday.
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