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What is a reverse stock split?

Q:

What is a reverse stock split?

A:

A reverse stock split is a corporate action in which a company proportionately reduces the total number of its authorized and outstanding shares. 

Two Harbors is effecting a one-for-two Reverse Stock Split, which means that every two shares of common stock will be converted into one share of common stock.  The Reverse Stock Split applies to all shares of Two Harbors common stock.  Accordingly, after the Reverse Stock Split, the aggregate number of shares of Two Harbors common stock issued and outstanding will be one-half of the number that was outstanding immediately before the Reverse Stock Split, subject to a reduction in the total number of shares as a result of cash payments made in lieu of the issuance of fractional shares.  See the question titled “How are fractional shares of Two Harbors common stock being treated in the Reverse Stock Split?”