By Janet H. Cho
Two stocks on Wednesday are demonstrating the opposite effect that splits can have on trading prices.
Barnes & Noble Education stock was sinking on Wednesday afternoon, as the operator of college bookstores and other academic services took measures to bolster its financial performance and stock price, including a 1-for-100 reverse stock split completed after Tuesday's market close.
The stock fell 23%, to $7.23, while the S&P 500 was up 0.8%.
On the other hand, Amphenol Corp., which makes electronic and fiber optic connectors, effected a 2-for-1 stock split, and its shares were up 2%.
On Tuesday, Barnes & Noble Education said it had successfully completed transactions to "significantly strengthen" its balance sheet with more than $100 million of new equity.
The company named Jonathan Shar as its new CEO, to succeed Michael P. Huseby, who resigned effective Tuesday.
"With a significantly improved balance sheet, we are well-positioned to advance our industry leadership while continuing to strategically invest in innovation and improve the experiences and value we bring to our customers and partner institutions," Shar said in a statement.
Shar was previously president of Barnes & Noble College and executive vice president of BNED Retail, where he oversaw the company's physical campus bookstores and e-commerce sites nationwide. Before joining the company in 2018, he was chief marketing officer at Akademos Inc., an e-commerce and digital marketing company providing online bookstore services, and general manager of NOOK Digital Content at Barnes & Noble Inc.
Still, Barnes & Noble Education shares have dropped 91% over nine consecutive days, their longest losing streak since Sept. 12, 2023, and are headed toward a record low, according to Dow Jones Market Data. Shares traded as low as $6.28 intraday.
The company received $95 million in new equity capital from a $50 million equity investment and $45 million equity rights offering led by Immersion Corp.Its second lien holders, affiliates of Fanatics, Lids, and VitalSource Technologies, converted about $34 million of outstanding principal into common stock.
It also extended a four-year asset-based loan facility from Bank of America, to provide the company with access to a $325 million revolving loan facility maturing in 2028.
The reverse stock split was part of its plan to regain compliance with the New York Stock Exchange's requirement that its shares close above $1 each over a consecutive 30-day period to remain listed. The move reduced the number of shares outstanding from about 2,620.5 million shares to approximately 26.2 million shares.
It also said that five new board members and two current directors had been appointed.
Write to Janet H. Cho at janet.cho@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 12, 2024 15:30 ET (19:30 GMT)
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