ProShares announced today that it will execute reverse share splits on nine ProShares ETFs. The reverse splits will be effective for shareholders of record after the close of the markets on April 14, 2010. Seven of the funds will execute a 1-for-5 reverse split of shares, and two will execute a 1-for-10 reverse split of shares. The funds will trade at their post-split prices on April 15. The ticker symbols for the funds will not change, and all will continue to trade on NYSE Arca.
The reverse splits will reduce the number of shares outstanding for the funds, and result in a proportionate increase in the price per share of each fund. The reverse splits do not change the value of a shareholder’s investment. For example, for the 1-for-5 reverse splits, every five pre-split shares held by a shareholder will result in the receipt of one post-split share, which will be priced five times higher than the pre-split shares.
Table 1Split Ratios and CUSIPs for Funds UndergoingReverse Splits Effective April 15, 2010
|DUG||UltraShort Oil & Gas||1:5||74347R586||74347X591|
|EEV||UltraShort MSCI Emerging Markets||1:5||74347R354||74347X575|
|FXP||UltraShort FTSE/Xinhua China 25||1:5||74347R321||74347X567|
|SMN||UltraShort Basic Materials||1:5||74347R651||74347X617|
|SRS||UltraShort Real Estate||1:5||74347R552||74347X583|
|URE||Ultra Real Estate||1:5||74347R677||74347X625|
For shareholders who hold quantities of shares that are not an exact multiple of the reverse split ratio (for example: a multiple of 5 for a 1-to-5 split), the reverse splits will result in the creation of fractional shares. Post-split fractional shares will be redeemed for cash. This redemption may cause some shareholders to realize gains or losses, which could be a taxable event for those shareholders.