In a move that could make its shares more attractive to potential investors, Popular Inc. (BPOP) in San Juan, P.R., is planning a reverse stock split in which shareholders would receive a single new share for each 10 shares owned.
The one for 10 split applies to shareholders of record as of April 27 and will take effect when the market opens May 30, the holding company for Banco Popular said in a news release this week.
As with many banking companies, Popular's shares plummeted in the wake of the financial crisis. Its stock has been trading below $2 for much the past year and since the start of 2008 it is down about 86%, to $1.75 midday Wednesday.
The reverse split will reduce the number of shares outstanding from roughly 1.03 billion to 103 million and increase its share price by a multiple of 10. That could make the stock more attractive to institutional investors, many of which will not invest in companies whose shares trade below $10.
Several other banking companies have completed reverse stock splits over the last year, including Citigroup (NYSE: C), which did a one for split last May when its shares were trading at just above $4.
Popular is the largest banking company based in Puerto Rico with $37 billion of assets, roughly $9 billion of which are in the mainland U.S. Its New York-based U.S. bank has roughly 100 branches in New York, New Jersey, Florida, Illinois and California
