ProShares Ultra Bloomberg Natural Gas (BOIL) is a well-known ETF that has undergone several stock splits in its history. As a leveraged ETF that seeks to provide double the daily performance of the Bloomberg Natural Gas Subindex, it has had to employ stock splits, particularly reverse splits, to manage its share price and adjust for the volatility inherent in its leveraged structure.
A Brief History of BOIL Stock Splits
BOIL has recorded four stock splits in its history. Interestingly, all these splits have been reversed, typically employed to increase the price of a stock’s shares and reduce the number of outstanding shares. Here’s a quick rundown of these splits:
- The first split occurred on May 11, 2012, and was a 1-for-5 reverse split. This means that for every five shares of BOIL owned pre-split, the shareholder ended up with one share post-split. Consider a hypothetical scenario where a pre-split position of 1000 shares would transform into a post-split position of 200 shares.
- On the 20th of May in the year 2015, the second split occurred. The reverse split that occurred was a 1-for-4, which resulted in the shareholder’s ownership being reduced to one share for every four shares of BOIL that were owned prior to the split. After the split, the 200-share position was reduced to a mere 50 shares.
- On the 20th of March in the year 2018, the third split occurred. This was also a 1-for-5 reverse split, similar to the first split. For instance, a 50-share position pre-split would have become a 10-share position post-split.
- The fourth split occurred on April 21, 2020. The reverse split that took place was a significantly drastic one-for-ten, resulting in the shareholder’s ownership of one share for every ten shares of BOIL owned prior to the split. For instance, a 10-share position pre-split would have become a 1-share position post-split.
Recent Developments
BOIL recently announced another reverse split in 2023 that continues its trend of reverse splits. At the dawn of Friday, June 23rd, 2023, a reverse split of 1-for-20 was executed. Following the close of the market that day, the shareholders’ shareholdings were subject to an adjustment. Consequently, an investor who had 100 shares of stock before the reverse split would end up with five shares after the split.
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Wrapping Up
Stock splits, particularly reverse splits, can be confusing to some investors. However, it’s important to remember that they don’t change the underlying value of the investment. In the case of BOIL, these reverse splits are a way to manage the share price due to the fund’s structure and the volatile nature of the commodities it tracks. Investors should always consider their risk tolerance and investment goals before investing in leveraged ETFs like BOIL.
FAQS
What is a stock split and a reverse stock split?
Through a stock split, a company can increase the number of shares available to investors by dividing existing shares. Conversely, a reverse stock split can decrease the number of shares outstanding, resulting in a higher price per share.
How many times has BOIL undergone a stock split?
As of June 2023, BOIL has undergone five reverse stock splits.
What was the ratio of the most recent BOIL stock split?
BOIL’s most recent stock split, which occurred on June 23, 2023, was a 1-for-20 reverse split.
Why does BOIL use reverse splits?
BOIL uses reverse splits to manage its share price and adjust for the inherent volatility in its leveraged structure.
Does a reverse split change the overall value of my investment in BOIL?
No, a reverse split does not alter the overall value of your investment; it merely changes the number of shares you own and the price per share.
