skip to content
  1. Home
  2. >
  3. Questions
  4. >
  5. TRI: Hello, TRI recently announced an upcoming reverse split of their shares. [Thomson Reuters Corporation]
You can view 2 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hello,

TRI recently announced an upcoming reverse split of their shares. This seems to to go against the usual practice of a reverse split whereby a low priced stock and out of favour stock (unlike TRI) will do one to drive up the price of their stock when it’s trading very low and in risk of being delisted as was the case of Bombardier recently and JDS Uniphase many years back. I’m having difficulty understanding why TRI would not just buy back shares via an NCI as opposed to a reverse split. Also, when is the reverse split scheduled and if I was to buy 10 shares tomorrow, how many of those shares would I have after the reverse split and would the price of TRI increase as a result of the reverse split as is normally the result of a reverse split. Many thanks for the amazing service that you provide.
Asked by Anthony on May 05, 2023
5i Research Answer:

The split is due to a return of capital of US$4.67 after the company sold a division. We agree it is a confusion methodology, but it is what it is. If one has 100 shares, they will get a payout of $4.67 per share and end up with 96.26 shares after the reverse split. The stock price is not likely to change materially with the split. The company as a whole will have fewer shares, but also less cash in a similar ratio.