The growth focussed diversified firm Agra Ventures Ltd (OTCMKTS:AGFAF) made a major announcement yesterday with regards to share consolidation but the announcement did not thrill investors much. The stock suffered from a selloff yesterday and ended the day with declines of as much as 13%.
The company announced that following a resolution among the directors of Agra Ventures, all the outstanding and issued shares are going to be consolidated into one share post consolidation for each block of 150 pre consolidation shares. However, the company also noted that fractional shares are not going to be issued after consolidation and any fractional shares are going to be rounded up to the closes whole number.
This is a significant move from Agra Ventures since the consolidation is going to reduce the number of shares considerable. Estimates suggest the outstanding common shares in Agra are going to be reduced by as many as 12,986,374 shares.
The number of common shares that can be issuable and the conversion as well as exercise price are all going to be adjusted after the whole thing is completed. A reduction in the number of shares is usually a good thing and hence, it remains to be seen if the Agra Ventures stock can make a recovery.