Source: FreeSeas Inc.
FreeSeas Announces Meeting Date for its 2010 Annual Meeting of Shareholders and Proposal to Approve Reverse Split
PIRAEUS, Greece, Aug. 19, 2010 (GLOBE NEWSWIRE) -- FreeSeas Inc. (Nasdaq:FREE) (Nasdaq:FREEZ) ("FreeSeas" or the "Company"), a transporter of dry-bulk cargoes through the ownership and operation of a fleet of eight Handysize vessels and two Handymax vessels, today announced that its 2010 Annual Meeting of Shareholders will be held on September 30, 2010. In addition to the election of two directors and the ratification of the appointment of the Company's independent auditors, the Company is proposing that its shareholders approve a 1-for-5 reverse split of its common stock. Upon approval of the proposal, the Company's outstanding Class Z warrants will be proportionately adjusted in accordance with the terms of the warrants.
Mr. Ion Varouxakis, Chairman and CEO, noted, "We propose to undertake this reverse split on our own accord, at a time we believe our stock is undervalued and the outlook for our Company is positive. We believe that raising our stock price above $5.00 will appeal to a broader universe of institutional investors, while also enabling our retail investor base to trade on margin."
Shareholders of record as of the close of business on August 23, 2010 will be entitled to vote at the Company's Annual Meeting. The details are as follows:
Details of Annual Meeting
Location: 89 Akti Miaouli & 4 Mavrokordatou Str.
Piraeus, 185 38, Greece
Phone: +30 210 4528770
Fax: +30 210 4291010
Time: 15:00 Greek time, 08:00am EST time
In my opinion a reverse split is a kiss of death! I've been involved in a few over the past few years and after the reverse split comes bankruptcy!!! It appears there is a lot of smoke being blown here to make things sound rosy. Better management & less games might be the answer for success.
You're right it's not an SEC law but if shareholder approval is needed in their by-laws and articles of incorporation they will need to get permission from their shareholders to avoid legal trouble;which I believe is the case.
I think the stock was so close to falling under $1 that they decided that they may as well reverse it now rather than take the chance of having to do it later.
Unfortunately history tells us that share prices tend to drop post-reverse splits and vice versa. Market reaction today says as much.
Oh dear, looks as though I'll see my $0.85-0.90 sooner rather than later (except it will be $4.25-4.50 in new shares).
On the back of the conf call, where the CEO was made to look a tad naive, this latest action now suggests pride and desperation.
IT WOULD BE SO MUCH SIMPLER TO SHIFT STRATEGY.
Can't even add a sentiment indicator to this post...just don't know whether to hold or just sell up and move on. This just gets worse and worse by the week.
I don't expect others will agree with me for one minute, but the proof will be in the share price activity.
I posted we'd see sub-1.05 when others were saying 1.30+ was a strong buy.
I posted we'd see 1.15 pre-results.
And now I've predicted that we are more likely to see sub-$1 than $1.25+. I just didn't think the CEO would help make it happen!!
CEO's actions are so daft, I'm beginning to wonder if this is all deliberate...is FREE heading private?
so I guess that would make trailing fully dilluted earnings 80C. And it would put shares outstanding at a little over 5M. Thing will move up and down fast.Might not be bad if daytraders get a hold of it post split with a larger amount of traders able to margin.