DENVER, United States-While other companies have adopted the reverse-stock-split strategy to boost their stock profiles, Ericsson said it has authorized a ratio change in its American depositary shares (ADS) effective 23 October in compliance with the Nasdaq National Market’s listing requirement.
“One new ADS will represent 10 class B-shares,” said Ericsson. “This will result in a technical price adjustment to the ADS corresponding to the ratio change. The current ratio is 1:1.”
The company expects to avoid the possible delisting, which has been hanging over the company.
The ratio change will reduce the number of outstanding ADSs from approximately 1.7 billion to approximately 170 million.
The Ericsson board also authorized its president and chief executive officer to delist its B shares from the Euronext, German and Swiss stock exchanges.
Following in the footsteps of Nortel Networks, Palm and other wireless companies, Lucent Technologies said it will ask its shareholders to approve a reverse stock split for a common share of US$15 to US$20 a share, a measure aimed at avoiding possible delisting.
The company’s stock has traded consistently at below US$1. It faces delisting if the trend continues for 30 consecutive trading days. The company expects an official notification from the New York Stock Exchange about its closing price soon.
