In investing, the term ‘stock split’ is often thrown around. This phenomenon can significantly impact an investor’s holdings, potentially increasing the number of shares they own or, in the case of a reverse split, reducing them. One company that has recently undergone a stock split is Annaly Capital Management, and in this blog, we will take a closer look at the event’s details.
A Brief History of NLY Stock Splits
According to our research, Annaly Capital Management (NLY) has undergone one stock split in its history. This split occurred on September 26, 2022, a 1 for four reverse splits.
A strategic move employed by companies to elevate their share price is through a reverse stock split, which effectively diminishes the number of shares in circulation. In the case of Annaly Capital Management, this means that for every four shares an investor-owned before the split, they ended up with one share post-split.
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The Most Recent NLY Stock Split
Annaly Capital Management recently made headlines when it declared a $0.88 per share quarterly dividend and announced another 1-for-4 reverse stock split. This news was released on September 8, 2022.
The dividend was maintained at $0.88 per share, representing the same value as the company’s prior dividend of $0.22 before the reverse stock split. This means that despite the reduced number of shares, the value returned to shareholders in dividends remained the same per share. On the 31st of October, the dividend was made payable, while the record date was set to be on the 30th of September.
Impact of Annaly Capital Management’s (NLY) Recent Stock Split
1. Consolidation of Shares
This is typically done in order to increase the value through the process of a reverse split, the quantity of outstanding shares is diminished by consolidating multiple shares into a smaller number of shares. In the case of NLY, every four shares were consolidated into one. This means if an investor held 100 shares before the split, they would have 25 shares after the split.
2. Increase in Share Price
The price per share typically sees an uptick following a reverse split, as the reduction in the number of outstanding shares tends to have this effect.
FAQs
Has Annaly Capital Management (NLY) ever split its stock before?
Annaly Capital Management executed a 1-for-4 reverse stock split on September 26, 2022.
What is a reverse stock split?
A strategic move employed by corporations to increase the value of their shares is the reverse stock split. This corporate action involves the consolidation of multiple shares into a single share, effectively reducing the number of outstanding shares.
What does a 1-for-4 reverse stock split mean?
In the event of a 1-for-4 reverse stock split, each shareholder’s pre-split holding of four shares of NLY will be consolidated into a single share, resulting in a post-split ownership of one share.
How did the reverse stock split affect NLY’s dividend?
Despite the reverse stock split, NLY maintained its dividend at $0.88 per share, representing the same value as the prior dividend of $0.22 before the reverse stock split.
Does a reverse stock split change the overall value of my investment in NLY?
No, a reverse stock split does not change the overall value of your investment; it simply decreases the number of shares you hold while proportionally increasing the price per share.
