Palace shareholders to vote on 600-for-one stock split
Published:Friday | December 30, 2022 | 12:50 AM
Shares of century-old Palace Amusement Company’s are about to get a lot cheaper, if shareholders agree to the 600-for-one stock split proposed by the cinema operator’s board of directors.
The authorised capital would also increase from 1.5 million shares to an unlimited number, according to a market filing on the Jamaica Stock Exchange that was pulled on the same day the notice was posted.
The resolutions are to be voted on by shareholders at the company’s annual general meeting to be held on January 24, it said.
The stock split, which would increase the shares in issue from 1.437 million to just over 862.2 million, would take effect a month after the vote, on February 28.
Palace Amusement Marketing Manager and director Melanie Graham did not immediately respond to requests for comment on the possible changes to the withdrawn notice.
However, the notice was back on the market after the close of trading on Thursday with no discernible change except for a header.
At the current value of the Palace stock, which closed at $1,425.94 per share on Wednesday, a 600-way split, were it effected that day, would have cut the share price to $2.38, but would have had no effect on the company’s market capitalisation of $2.05 billion.
The corporate action would be the first in the company’s near 50- year history of trading on the Jamaica Stock Exchange. It will go from being the market’s most expensive stock to become one of the cheapest, making the stock more accessible to retail investors.
Palace Amusement, which operates five cinemas, is currently in recovery mode after the coronavirus pandemic devastated its business when movie-watching shifted under the lockdown from theatres to streaming services.
The company’s strategy over the past two and half years has largely been recovery loans, the opening and closing of select locations depending on patronage, alongside efforts to secure more attractive movies for its cinemas.
Palace’s revenues grew threefold to $250 million for the first quarter ending September, but the performance was not enough to pull it out of the red. The company reported losses of $54 million for the period.