This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Generex Plans Reverse Stock Split

TORONTO ( TheStreet) -- Generex Biotechnology (GNBT) is planning a reverse stock split to raise the price of its common stock and stave off delisting from the Nasdaq.

In a proxy filing last week, Generex, developers of an experimental oral insulin spray known as Oral-lyn, said it plans to seek shareholder approval to implement a reverse stock split aimed at lifting its stock price above $1 a share. Generex holds its annual shareholder meeting on July 28.

Generex faces delisting from the Nasdaq later this year because the stock doesn't meet the exchange's listing requirements, according to a non-compliance notice reported to the SEC by the company. Generex shares closed Tuesday at about 38 cents and have traded below the $1-a-share threshold since June 2008.

"We wish to thank our long term stockholders for their continuing support," said Generex CEO Anna Gluskin in a company press release that announced the receipt of a non-compliance notice from Nasdaq. Gluskin added, "Management is devoted to securing the best interests of Generex, thereby creating value for its stockholders."

In a reverse stock split, a company reduces the number of common shares outstanding, thereby increasing the price of each share of common stock proportionally.

The bump in the stock price is frequently only a temporary reprieve.

"Most reverse stock splits don't work because all the bad things that caused the company's stock price to fall are still there after the split," said Jon Johnson, chief market strategist at, an investment newsletter that tracks stock splits.

Generex is contemplating an exchange ratio of not less than 1-for-3 and not more than 1-for-10, according to the company's proxy statement. This implies a per-share stock price of at least $1.08 and as much as $3.70 after the reverse stock split, based on Generex's current stock price.

In a typical reverse stock split, companies also reduce the number of shares in their corporate treasury. However, Generex says it intends to maintain the number of shares in its corporate treasury at 750 million, equal to the amount of treasury shares before the planned reverse stock split, according to plans detailed in its proxy statement.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
GNBT $0.02 -0.51%
AAPL $124.24 0.70%
FB $83.01 0.11%
GOOG $555.17 -0.65%
TSLA $190.41 -2.00%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs