Medalist is trying to boost its stock price after it has fallen steadily since its IPO five years ago.
As it fends off public criticism from some vocal shareholders, a local publicly traded real estate firm is employing a new tactic to get its share price out of the doldrums.
Medalist Diversified REIT announced last week its plans to conduct a one-for-eight reverse stock split, which would convert every eight of the company’s shares into one share, thereby boosting the value of each share.
Trading on Nasdaq under the ticker symbol MDRR, Medalist’s stock has struggled since its IPO in 2018, falling 92 percent in that time. It closed at $0.70 per share on Tuesday and has closed at above $1 only twice since May 2022.
That streak of sub-$1 closing days has left the company out of compliance with Nasdaq pricing rules and facing a delisting later this summer if its shares don’t close at or above $1 for at least 10 consecutive trading days.
“The Reverse Stock Split is intended to help the Company regain compliance with the $1.00 minimum bid price requirement for continued listing on Nasdaq,” Medalist said in an SEC filing last week.
Medalist currently has around 17.7 million outstanding shares. The reverse split would reduce that figure to approximately 2.2 million. Based on its current market cap of $12.4 million, the company’s stock would trade at around $5.60 per share immediately after the split.
It said the reverse split is expected to take effect after the closing bell on May 3.
Hanover Square North shopping center is Medalist’s lone local holding. (BizSense file)
Medalist was founded as a private real estate fund in 2013, before going public five years later. The company owns eight properties across Virginia, North Carolina and South Carolina. It is headquartered in James Center in downtown Richmond.
Its lone Richmond-area holding is Hanover Square North shopping center in Mechanicsville, which is anchored by retailers Marshalls and Old Navy.
The split tactic comes as Medalist explores “strategic alternatives,” including a potential sale of the company. It has hired Jones Lang LaSalle Securities and law firm Troutman Pepper to handle the process, which the company says is ongoing.
“The Special Committee is in active discussions with potential parties in pursuit of those alternatives and the Company will provide further disclosures as appropriate or required by law or regulation,” it said in the SEC filing. “While the review is underway, the Company remains fully focused on its operations and on the continued execution of its strategies to create stockholder value.”
The company has declined to comment in recent weeks beyond its statements in SEC filings.
It also has declined to respond publicly to concerns voiced by certain shareholders as to the performance of the company and its leadership.
One shareholder in particular, Jon Wheeler from Virginia Beach, has taken on an activist shareholder stance in calling for management changes at Medalist. Wheeler, who was ousted from his own REIT after its financial struggles, recently took out billboards in Richmond to draw attention to Medalist’s lagging performance.
Medalist is trying to boost its stock price after it has fallen steadily since its IPO five years ago.
As it fends off public criticism from some vocal shareholders, a local publicly traded real estate firm is employing a new tactic to get its share price out of the doldrums.
Medalist Diversified REIT announced last week its plans to conduct a one-for-eight reverse stock split, which would convert every eight of the company’s shares into one share, thereby boosting the value of each share.
Trading on Nasdaq under the ticker symbol MDRR, Medalist’s stock has struggled since its IPO in 2018, falling 92 percent in that time. It closed at $0.70 per share on Tuesday and has closed at above $1 only twice since May 2022.
That streak of sub-$1 closing days has left the company out of compliance with Nasdaq pricing rules and facing a delisting later this summer if its shares don’t close at or above $1 for at least 10 consecutive trading days.
“The Reverse Stock Split is intended to help the Company regain compliance with the $1.00 minimum bid price requirement for continued listing on Nasdaq,” Medalist said in an SEC filing last week.
Medalist currently has around 17.7 million outstanding shares. The reverse split would reduce that figure to approximately 2.2 million. Based on its current market cap of $12.4 million, the company’s stock would trade at around $5.60 per share immediately after the split.
It said the reverse split is expected to take effect after the closing bell on May 3.
Hanover Square North shopping center is Medalist’s lone local holding. (BizSense file)
Medalist was founded as a private real estate fund in 2013, before going public five years later. The company owns eight properties across Virginia, North Carolina and South Carolina. It is headquartered in James Center in downtown Richmond.
Its lone Richmond-area holding is Hanover Square North shopping center in Mechanicsville, which is anchored by retailers Marshalls and Old Navy.
The split tactic comes as Medalist explores “strategic alternatives,” including a potential sale of the company. It has hired Jones Lang LaSalle Securities and law firm Troutman Pepper to handle the process, which the company says is ongoing.
“The Special Committee is in active discussions with potential parties in pursuit of those alternatives and the Company will provide further disclosures as appropriate or required by law or regulation,” it said in the SEC filing. “While the review is underway, the Company remains fully focused on its operations and on the continued execution of its strategies to create stockholder value.”
The company has declined to comment in recent weeks beyond its statements in SEC filings.
It also has declined to respond publicly to concerns voiced by certain shareholders as to the performance of the company and its leadership.
One shareholder in particular, Jon Wheeler from Virginia Beach, has taken on an activist shareholder stance in calling for management changes at Medalist. Wheeler, who was ousted from his own REIT after its financial struggles, recently took out billboards in Richmond to draw attention to Medalist’s lagging performance.
I love the way companies “play” with their stocks and think it solves everything. Caring more about your stock price than the fundamentals of your business are a sure red flag to me.
Maybe try changing the name?
They should sell it to a bigger happening Reit fish and let that fish redevelop their properties.