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GraniteShares

Research

3STS-Reverse Split effective 17 May 2021

Posted:
Topic: Technology
Publication Type: Regulatory News

GraniteShares 3x Short Tesla Daily ETP Securities (3STS) – Reverse split effective 17 May 2021

On 3rd May 2021, GraniteShares Financial Plc announced the decision to consolidate the GraniteShares 3x Short Tesla ETP Securities (3STS).  The record date will be on 14th May 2021 (Record Date) with the consolidation date effective on 17th May 2021 (Ex-Date). For every 1,500 securities owned, the Securityholder will receive 1 new security in exchange.

ETP Securities

GraniteShares 3x Short Tesla Daily ETP

Record Date of consolidation of ETP Securities

14 May 2021

Effective Date of consolidation of ETP Securities

17 May 2021

Details of consolidation

Every 1,500 ETP Securities held by a Securityholder will be consolidated into 1 ETP Security.

 

Why is GraniteShares consolidating 3STS?

GraniteShares believes it is in the Securityholders’ interest to keep the ETP Securities prices within efficient trading ranges, and to try and avoid situations where security prices become too low or too high.

GraniteShares believes consolidating will create a more cost-effective product price for investors and might help reduce bid-ask spreads.

Will the consolidation impact the value of my investment?

No. Securityholders will own fewer ETP Securities than before the consolidation but the Value per ETP will be proportionally higher. As a result, the value of a Securityholders investment will not change (see Example 1 below). If the consolidation results in any fractional securities, they will automatically be redeemed in cash (see Example 2 below).

Example 1 – With no fractional securities – For illustration purposes only

 

# ETP Securities owned

Hypothetical

Value per ETP

Value of the position

Pre-effective date

600,000

0.005

US$ 3,000.00

Effective date

400

[= 600,000 / 1,500]

7.500

[0.005*1500]

US$ 3,000.00

 

Example 2 – With fractional securities - For illustration purposes only

 

# ETP Securities owned

Hypothetical

Value per ETP

Value of the position

Pre-effective date

608,000

US$ 0.005

US$3,040.00

Effective date

New securities

405

[= 608,000 / 1,500 rounded down]

US$ 7.500

[0.005*1500]

US$3,037.50

Fractional securities

500

[608,000 – 405 * 1,500]

US$ 0.005

US$ 2.50

The cumulative vale of the new securities (US$ 3,037.50) and of the fractional securities (US$ 2.50) is equal to the value of the position pre-consolidation (US$ 3,040)

What will happen to the fractional securities?

Fractional ETP Securities shall become due and payable at the greater of the Value per ETP as determined on the Record Date (14 May 2021) and the Minimum Redemption Amount. Proceeds linked to Fractional ETP Securities are expected to be transferred to the clearing systems on 19 May 2021.

Please note it may take a few days for the payment to reach your broker’s or custodian’s accounts, and from there your broker may take more time processing the payment to your account.

Will there be additional fees involved?

GraniteShares will not charge any commissions or fees related to the consolidation of securities or disbursement of the payments if fractional securities are involved. However, there may be fees that are charged by your broker, custodian or settlement systems. To the extent that you hold your securities through a broker, custodian or other intermediary, please contact that intermediary for information on how they will pass on the payments. Typically, you should expect to receive the payment in much the same way you receive a dividend. It may take longer for the payment to find its way to your account if you hold 3STS through a broker or a nominee account of another kind. Your broker, bank or financial adviser will be able to provide further information regarding how this process will work with respect to your account.

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