Home > Direxion Reaffirms Reverse and Forward Splits of 16 ETFs
Print

Direxion Reaffirms Reverse and Forward Splits of 16 ETFs

March 15th, 2013

direxion_logoDirexion, a leader in alternative investment solutions, has announced it will execute reverse share splits for eight of its leveraged exchange-traded funds (“ETFs”), as well as forward share splits for another eight leveraged ETFs. The total market value of the shares outstanding will not be affected as a result of these splits, except with respect to the redemption of fractional shares, as outlined below.

The firm will execute a 1-for-6 reverse split of the shares of the Direxion Daily Energy Bear 3X Shares (NYSEARCA:ERY) and a 1-for-5 reverse split of the shares of the Direxion Daily China Bear 3X Shares (NYSEARCA:YANG), Direxion Daily Emerging Markets Bear 3X Shares (NYSEARCA:EDZ), Direxion Daily Technology Bear 3X Shares (NYSEARCA:TECS) and Direxion Daily Gold Miners Bull 3X Shares (NYSEARCA:NUGT) for shareholders of record after the close of the markets on Monday, April 1, 2013. The firm will also execute a 1-for-4 reverse split of the shares of the Direxion Daily Financial Bear 3X Shares (NYSEARCA:FAZ) and Direxion Daily Small Cap Bear 3X Shares (NYSEARCA:TZA), and a 1-for-3 reverse split of the shares of the Direxion Daily Mid Cap Bear 3X Shares (NYSEARCA:MIDZ) for shareholders of record after the close of the markets on Monday, April 1, 2013.

A summary of the eight ETFs undergoing reverse splits is as follows (Please note the CUSIP changes, effective April 2, 2013):


ETF CURRENT CUSIP NEW CUSIP RATIO
Direxion Daily Energy Bear 3X Shares (ERY) 25459W342 25459Y454 1:6
Direxion Daily China Bear 3X Shares (YANG) 25459W763 25459Y462 1:5
Direxion Daily Emerging Markets Bear 3X Shares (EDZ) 25459W482 25459Y470 1:5
Direxion Daily Technology Bear 3X Shares (TECS) 25459W318 25459Y439 1:5
Direxion Daily Gold Miners Bull 3X Shares (NUGT) 25459W250 25459Y496 1:5
Direxion Daily Financial Bear 3X Shares (FAZ) 25459W144 25459Y447 1:4
Direxion Daily Small Cap Bear 3X Shares (TZA) 25459W110 25459Y488 1:4
Direxion Daily Mid Cap Bear 3X Shares (MIDZ) 25459W136 25459Y421 1:3

Additionally, Direxion will execute a 3-for-1 forward split of the shares of the Direxion Daily Financial Bull 3X Shares (NYSEARCA:FAS), Direxion Daily Retail Bull 3X Shares (NYSEARCA:RETL), Direxion Daily Emerging Markets Bull 3X Shares (NYSEARCA:EDC) and Direxion Daily S&P 500 Bull 3X Shares (NYSEARCA:SPXL), and a 2-for-1 forward split of the shares of the Direxion Daily Real Estate Bull 3X Shares (NYSEARCA:DRN), Direxion Daily Latin America Bull 3X Shares (NYSEARCA:LBJ), Direxion Daily 7-10 Year Treasury Bull 3X Shares (NYSEARCA:TYD) and Direxion Daily Small Cap Bull 3X Shares (NYSEARCA:TNA) according to the following schedule:

Record Date:              Thursday, March 28th, 2013

Payable Date:             Monday, April 1st, 2013

Ex-Date:                      Tuesday, April 2nd, 2013

A summary of the eight ETFs undergoing forward splits is as follows (CUSIPs remain the same):

ETF

CUSIP

RATIO

Direxion Daily Financial Bull 3X Shares (FAS)

25459Y694

3:1

Direxion Daily Retail Bull 3X Shares (RETL)

25459W417

3:1

Direxion Daily Emerging Markets Bull 3X Shares (EDC)

25459Y686

3:1

Direxion Daily S&P 500 Bull 3X Shares (SPXL)

25459W862

3:1

Direxion Daily Real Estate Bull 3X Shares (DRN)

25459W755

2:1

Direxion Daily Latin America Bull 3X Shares (LBJ)

25459Y652

2:1

Direxion Daily 7-10 Year Treasury Bull 3X Shares (TYD)

25459W565

2:1

Direxion Daily Small Cap Bull 3X Shares (TNA)

25459W847

2:1

Shareholders of record as of the close of business on Thursday, March 28th 2013, should expect to receive the additional shares after the close of business on the Payable Date, Monday, April 1st 2013.  The shares are expected to trade at post-split prices beginning on the Ex Date, Tuesday, April 2nd 2013.  Those purchasing shares that do not settle before the Record Date, but that are purchased between March 26th, 2013 and April 1st 2013 (inclusive), and do not sell their shares prior to April 2nd 2013, will be entitled to receive the additional shares, which they will receive on or about, April 4th 2013. As stated previously, the total market value of the shares outstanding will not be affected as a result of the reverse and forward splits, except with respect to the redemption of fractional shares, as outlined below.

The Depository Trust Company (“DTC”), the registered owner of all ETF shares, has been notified of the reverse and forward splits and has been instructed to adjust each shareholder’s investment accordingly.

Hypothetical Example of 1-for-6 reverse split:

1-for-6 Reverse Split

Period

# of Shares Owned

Hypothetical Market Price

Total Share Value

Pre-Split

120

$10

$1,200

Post-Split

20

$60

$1,200

Hypothetical Example of 3-for-1 forward split:

3-for-1 Forward Split

Period

# of Shares Owned

Hypothetical Market Price

Total Share Value

Pre-Split

30

$30

$900

Post-Split

90

$10

$900

Redemption of Fractional Shares and Tax Consequences for each Reverse and Forward Split

As a result of the reverse and forward splits, a shareholder of each ETF could potentially hold a fractional share. However, fractional shares cannot trade on NYSE Arca. Thus, each ETF will redeem for cash a shareholder’s fractional shares at the Fund’s split-adjusted NAV. Such redemptions could cause a shareholder to realize a gain or loss. Otherwise, the reverse and forward splits will not result in a taxable transaction for holders of ETF shares. No transaction fee will be imposed on shareholders for such redemptions.

“Odd Lot” Unit

As a result of the reverse and forward splits, the ETFs will have outstanding one aggregation of less than 50,000 shares to make a creation unit, or an “odd lot unit.” Thus, each ETF will provide one authorized participant with a one-time opportunity to redeem the respective odd lot unit at its split-adjusted NAV, or at the NAV on such date the authorized participant seeks to redeem the odd lot unit.


NYSE:EDZ, NYSE:FAS, NYSE:FAZ, NYSE:NUGT, NYSE:TNA, NYSE:TZA


 

Tags: , , , , , , , , , , , , , , , , , , , , , , , ,

Facebook Comments

Comments



  1. No comments yet.
  1. No trackbacks yet.




Copyright 2009-2014 WBC Media, LLC