In a bid to boost trading of the company’s publicly traded common shares, Weyburn Inland Terminal has undertaken a five-for-one stock split.
Shareholders will receive four additional shares for each common share owned as of Nov. 4.
That will increase the number of outstanding common shares from 1.15 million to more than 5.5 million.
The value of each share will simultaneously decline from roughly $53 to around $10.50.
Company chief executive officer Rob Davies said a stock split is common practice for companies that want to ensure enough shares are on the market to ensure price discovery and liquidity.
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WIT shares trade over the counter through Union Securities Ltd., but trading has been sluggish, said company president Claude Carles.
“People seem to hold our shares pretty close and it’s pretty hard to shake them loose,” he said in an interview.
“We have more buyers than sellers.”
He said it’s hoped shareholders will be more amenable to selling a $10 share than a $50 share, allowing more of the purchaser demand to be met.
“Whether this has that effect or not remains to be seen,” Carles said.
He added studies indicate that Canadian investors prefer stock prices in the range of $10 to $50 and that stock splits are generally successful in boosting liquidity.
This represents the third time WIT has implemented a stock split, the previous two being in 1978 and 1998.
– EWINS
