Why did Two Harbors effecting a Reverse Stock Split?
The decision to effect the Reverse Stock Split was based on our expectation that, following the distribution of Granite Point common stock through the Stock Dividend, the market price and trading ranges for the shares of Two Harbors common stock will be significantly lower than the current market price and trading ranges. This is due to the fact that Two Harbors distributed all of the value of Granite Point to the holders of Two Harbors common stock through the Stock Dividend. We believe that effecting the Reverse Stock Split, which resulted in fewer shares of the Two Harbors common stock outstanding, is likely to (1) increase the market price and (2) improve the marketability and liquidity of Two Harbors common stock. There is significant market precedent for doing a reverse stock split concurrently with a distribution similar to the Granite Point Stock Dividend.