Changes have been confirmed for one of the best-known names in the oil and gas sector. This week began with Shell (NYSE:SHEL) finalizing a major rebrand. Last month saw the company, previously known as Royal Dutch, abandon its name after relocating its corporate headquarters. SHEL stock is now trading on the New York Stock Exchange as a single line of American Depository Shares (ADSs). Meanwhile, across the pond, single lines of ordinary shares are also trading on the Euronext Amsterdam and the London Stock Exchange.
What’s Happening With SHEL Stock
Earlier this week, Shell’s big plans finally kicked into motion as SHEL stock started trading under its new ticker. Previously, U.S. investors could access the company on the NYSE through the tickers RDS-A and RDS-B. The primary difference between the two share classes came down to location for tax purposes.
SHEL shares initially responded well to the news, although they are down slightly this morning as the major indices falter. Investors shouldn’t be discouraged by SHEL stock’s overall performance this week, though.
Why It Matters
The initial news of this structure simplification received approval from Shell’s board on Dec. 20, 2021. Since then, SHEL stock has performed well with only one downtick since the year began. The company confirmed that “the assimilation has not altered the total number of shares held by any shareholder or ADSs held by any ADS holder.”
Importantly, this move to simplify Shell’s share structure comes as the company relocates its head office to London. As Reuters reports, this decision came in response to taxes and climate pressure.
It’s still an excellent time to be in Shell’s market. Goldman Sachs recently recommended energy stocks as a top investment for hedging against inflation risk, indicating a belief that the oil wave was going to continue. And as InvestorPlace contributor Joel Baglole noted, “Like Chevron (NYSE:CVX), Shell is involved in both upstream and downstream aspects of the oil industry with 86,000 employees globally.”
This puts the company in a good position to benefit from a rally in oil stocks. Demand is rising across the globe and prices are moving along with it. The recent restructuring process was designed to, among other things, help the company streamline efficiency efforts. All signs point toward a good year ahead for SHEL stock.
What It Means
The company’s simplification news won’t be a major driver for SHEL stock by itself. With the current oil boom and rising prices, though, investor interest in energy stocks will only grow. For one of the sector’s largest and most powerful companies, restructuring to a single line of shares only makes things simpler for investors looking to board this train.
SHEL stock was worth watching before the company ditched its previous name. As it moves forward now, investors should definitely be taking note.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
