Durrant Pate/Contributor

The board of Stationery & Office Supplies (SOS) Limited has approved a proposal for a 9:1 stock split during a special meeting on Wednesday (June 21).

In making its decision on the stock split, the board acknowledged that, “the market value of the company’s stock has been on a consistent growth trajectory and the liquidity of the stock is also a significant consideration.” 

A stock split is when a company divides and increases the number of shares available to buy and sell on an exchange.

A stock split lowers its stock price but doesn’t weaken its value to current shareholders. Rather, it increases the number of shares and might entice would-be buyers to make a purchase. For example, after a 2-for-1 split, each investor will own double the number of shares, and each share will be worth half as much.

The matter now goes to shareholders, who will vote on the 9:1 stock split at their next Annual General Meeting, scheduled for July 25.

Share issue set to climb

The proposed stock split will result in the total issued shares in the company being increased from 250.12 million to 2.25 billion shares. To facilitate this subdivision of shares, the board is recommending to shareholders for approval that the number of ordinary shares in the company be increased from 500-million to 500-billion shares with effect from the close of business on July 25.

News of the contemplated stock split this week sent demand for the share north in trading. The stock price advanced by J$6.43 to J$26.45, an up upward movement of 32.15% with just over 523-thousand shares exchanging hands on Tuesday.

The stock price advanced even further and was traded yesterday at $32.72, its highest since the start of the year when it opened at J$26.43. Prior to today the stock traded at a high of J$26.43 to a low of J$11.55 in the last 52 weeks.