The United States Oil Fund, ticker USO, will reduce its shares in an effort to boost its price in an 8-1 a reverse split, according to a Wednesd...
The ETF will do what is called a reverse split,. Shareholders of the ETF will get one share for every eight that they hold in the fund, significantly lowering the number of shares outstanding.
In theory, reducing the number of shares will boost the price by increasing the net asset value per share. The split will take place after the close of trading on April 28, and will be reflected the next day. Wall Street's best-performing fund this year breaks down its long-term strategy that's outsmarting 99% of peers — and shares 7 stocks to buy for a post-pandemic world
"The reverse share split will affect all of USO's shareholders," USCF wrote in a statement."The reverse share split will not affect any shareholder's percentage interest in USO, except to the extent that the reverse share split results in a shareholder receiving cash in the transaction." The move to reduce the number of shares of the exchange traded fund comes after steep losses — the retail-investor fund is down 77% this year. The popular ETF's decline is tied to the price of oil, which on Monday closed around negative $37 per barrel.
Reverse split does not change the underlying assets in the fund, and doesn't boost its market value. Instead, it combines shares to make the new price higher. On Wednesday, USO opened higher but then fell more than 10% to about $2.50 per share before trading was halted.
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