Rexahn Pharmaceuticals, Inc. (NYSEMKT:RNN) shares are deep in the red today after the company announced plans to implement a 1-for-10 reverse stock split effective May 5, 2017. The company is likely doing so to stay listed on the NYSE MKT. Shareholders will receive cash in lieu of any fraction of a share that they would otherwise be entitled to receive.
CEO Peter D. Suzdak said, ‘I want to thank our shareholders for their continued support of Rexahn. Our board has determined that this is an appropriate time to implement a reverse split and we believe that it will enhance the appeal of our common stock to the financial community, including institutional investors and the general investing public. The continued commitment of our shareholders has allowed us to progress the clinical development of our targeted therapies for the treatment of cancer patients’.
Although the reverse stock split doesn’t affect Rexahn Pharmaceuticals, Inc. (NYSEMKT:RNN)’s fundamentals, the split may make it easier for the stock to short, hence the decline today.
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The Bottom Line
Rexahn Pharmaceuticals, Inc. (NYSEMKT:RNN) shares are lower due to a proposed reverse stock split. For more reading, check out ‘10 Most Popular Stocks Among Hedge Funds‘.