MCLEAN, VA - Gladstone Capital (NASDAQ:GLAD) Corporation (NASDAQ:GLAD) has announced a reverse stock split of its common stock at a 1-for-2 ratio, effective at the start of trading on April 5, 2024. This action will consolidate every two shares of issued and outstanding common stock into one share, maintaining the current par value per share.
The reverse stock split will halve the number of outstanding common shares from approximately 43.5 million to about 21.8 million, while the authorized shares under the company's articles of incorporation will remain at 44.0 million. The common stock will continue trading on the Nasdaq Global Select Market under the ticker symbol GLAD, with a new CUSIP number of 376535878.
Monthly shareholder distributions will remain the same, adjusting to reflect the reverse split. No fractional shares will be issued; instead, Computershare Trust Company, N.A., the company's transfer agent, will sell these shares on the open market and distribute the net proceeds to stockholders on a pro rata basis. This cash payment may incur applicable taxes.
Stockholders holding shares in book-entry form or through a bank, broker, or nominee need not take any action. Those with stock certificates will receive instructions from Computershare on exchanging them for a statement of holding and any cash in lieu of fractional shares.
The reverse stock split does not affect the company's preferred stock.
Gladstone Capital Corporation is a business development company focusing on secured first and second lien term loans to lower middle market businesses in the United States. This move is based on a press release statement from the company.
InvestingPro Insights
As Gladstone Capital Corporation (NASDAQ:GLAD) embarks on a reverse stock split, it's crucial for investors to consider the company's financial health and market performance. The InvestingPro data provides a snapshot of GLAD's current financial metrics.
With a market capitalization of approximately $459.89 million and a P/E ratio of 7.3, the company presents an interesting valuation in the market. Notably, GLAD has demonstrated a strong revenue growth of 36.34% over the last twelve months as of Q1 2024, with a quarterly growth rate of 20.35% in Q1 2024.
Moreover, GLAD's commitment to shareholder returns is evident through its significant dividend yield of 9.23%, and it has a history of maintaining dividend payments for 24 consecutive years. This consistency is a reassuring sign for income-focused investors. However, an InvestingPro Tip suggests that the valuation implies a poor free cash flow yield, which could be a point of consideration for those assessing the company’s future cash generation potential.
An important metric for shareholders is the company's profitability, and GLAD has been profitable over the last twelve months. This is a testament to the company's ability to navigate the market and maintain its financial stability. For investors looking for more comprehensive insights and tips, there are additional InvestingPro Tips available on the company's profile at Investing.com. Moreover, for those interested in an InvestingPro subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a deeper dive into investment analysis and data.
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