Hemp Inc. underwent a 10:1 reverse stock split on July 31st. Many people have asked, “What does a reverse stock split mean? Why is HEMP now HEMPD? Good News! No need to panic… the stock is still there!
A reverse stock split requires time to go through the process to register all the information with the stock brokerage firms. All the shareholders still have their stock… we have just consolidated the shares and increased the value.
We strive to keep our shareholders informed, so we will provide some explanations below that may help you understand what is happening.
How Long Does the letter “D” Stay On a Stock Symbol After a Reverse Stock Split?
A reverse stock split is a corporate action whereby a company reduces the number of shares outstanding and increases the price of its stock. A company may decide to use a reverse split to shed its status as a penny stock, or to avoid being delisted.
Hemp Inc. has undergone a 10:1 reverse stock split, which means that each shareholder receives one share for every ten they hold. In other words, they get half as many shares, but they’re worth more than before.
A company that has undergone a reverse stock split often gets the letter “D” attached to the end of its ticker symbol. This letter is used to designate a company that is undergoing a stock split of some sort (most often a reverse stock split), or some form of corporate reorganization. This letter is generally attached to the end of the ticker for approximately 20 trading days before it’s removed.
Why a Reverse Stock Split?
A reverse stock split is a process by which shares of corporate stock are effectively merged to form a smaller number of proportionally more valuable shares. A reverse stock split is also called a stock merge and works out so the shareholder should end up with an equivalent value.
Typically, the exchange temporarily adds a “D” to the end of a ticker symbol during a reverse stock split. Sometimes a company may concurrently change its name. This is known as a name change and consolidation (i.e. using a different ticker symbol for the new shares). It doesn’t mean that the shareholders of the old ticker symbol have lost their stock… it’s converted to the new symbol.
In the case of Hemp Inc., we are not changing our name and the stock will go back to HEMP as soon as the process of the split is complete.
In a simple stock split, the original shares remain on the exchange as shareholders receive additional shares based on their existing holdings. In both stock splits and reverse splits, the share price is adjusted in proportion to the increase in shares to maintain equal value.
Join the Hemp Revolution!
Hemp Inc.’s goal is to increase its value, by becoming the industry leader in the “Hemp Revolution”. We have made some very forward thinking decisions that will position the company at the top of industrial hemp processing.
Already 13 states have legalized university research projects and state agricultural programs for industrial hemp production. We believe that hemp will once again become a commodity in the U.S. Not only will this industry create jobs for people, there are numerous products that can be made from hemp. We can virtually use the entire plant!
“With the U.S. hemp industry estimated at over $500 million in annual retail sales and growing, a change in federal law to allow colleges and universities to grow hemp for research means that we will finally begin to regain the knowledge that unfortunately has been lost over the past 50 years,” said Eric Steenstra of Vote Hemp.
Hemp Inc. is positioned to be the leader in the industrial hemp industry with our decortication plant in North Carolina going live in the fourth quarter of 2015. Until hemp becomes legal to grow, we plan on processing kenaf, which has similar fiber qualities. We are also bringing a very high quality Hemp CBD product line to you very soon.
Please check out our video updates on YouTube to see our progress with the decortication plant in North Carolina and our kenaf crop, which is growing quickly and should be ready for harvest sometime in October. Let’s green the planet together! Join the Hemp Revolution!
Visit the Hemp Inc. website for more information.
By Devi Barnard