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Direxion Announces Reverse and Forward Share Splits of Fifteen ETFs

NEW YORK, Feb. 28, 2017 /PRNewswire/ -- Direxion has announced it will execute reverse share splits for eight of its exchange-traded funds ("ETFs"), as well as forward share splits for another seven ETFs. The total market value of the shares outstanding will not be affected as a result of these splits, except with respect to the redemption of fractional shares, as outlined below.

Eight Reverse Splits
Direxion will execute reverse splits of the Direxion Daily S&P 500® Bear 1X Shares, Direxion Daily Gold Miners Index Bull 3X Shares, Direxion Daily Junior Gold Miners Index Bull 3X Shares, Direxion Daily Junior Gold Miners Index Bear 3X Shares, Direxion Daily Semiconductor Bear 3X Shares, Direxion Daily Regional Banks Bear 3X Shares, Direxion Daily Russia Bear 3X Shares, and Direxion Daily S&P 500® Bear 3X Share. The splits are effective at the open of the market on May 1, 2017.

A summary of the eight ETFs undergoing reverse splits is as follows (please note the CUSIP changes, effective May 1, 2017):

 

Fund Name

Ticker

Current
CUSIP

New CUSIP

Reverse Split
Ratio

Approximate
decrease in total
number of
outstanding shares

Direxion Daily S&P 500® Bear
1X Shares

SPDN

25490K216

25460E869

1 for 2

50%

Direxion Daily Gold Miners
Index Bull 3X Shares

NUGT

25490K570

25460E844

1 for 4

75%

Direxion Daily Junior Gold
Miners Index Bull 3X Shares

JNUG

25490K554

25460E851

1 for 4

75%

Direxion Daily Junior Gold
Miners Index Bear 3X Shares

JDST

25490K141

25460E877

1 for 4

75%

Direxion Daily Semiconductor
Bear 3X Shares

SOXS

25490K778

25460E836

1 for 5

80%

Direxion Daily Regional Banks
Bear 3X Shares

WDRW

25459Y124

25460E802

1 for 5

80%

Direxion Daily Russia Bear 3X
Shares

RUSS

25490K786

25460E828

1 for 5

80%

Direxion Daily S&P 500® Bear
3X Shares

SPXS

25459Y371

25460E885

1 for 5

80%

 

As a result of this reverse split, every two, four or five shares of a Fund will be exchanged for one share as indicated in the table above.  Accordingly, the total number of the issued and outstanding shares for the Funds will decrease by the approximate percentage indicated above.  In addition, the per share net asset value ("NAV") and next day's opening market price will be approximately two-, four- or five-times higher for the Funds.  Shares of the Funds will begin trading on the NYSE Arca, Inc. (the "NYSE Arca") on a split-adjusted basis on May 1, 2017.

The next day's opening market value of the Funds' issued and outstanding shares, and thus a shareholder's investment value, will not be affected by the reverse split.  The table below illustrates the effect of a hypothetical one-for-two, one-for-four or one-for-five reverse split anticipated for the Funds, as applicable and described above:

 

1-for-2 Reverse Split

Period

# of Shares Owned

Hypothetical NAV

Total Market Value

Pre-Split

120

$10

$1,200

Post-Split

60

$20

$1,200

 

1-for-4 Reverse Split

Period

# of Shares Owned

Hypothetical NAV

Total Market Value

Pre-Split

120

$10

$1,200

Post-Split

30

$40

$1,200

 

1-for-5 Reverse Split

Period

# of Shares Owned

Hypothetical NAV

Total Market Value

Pre-Split

120

$10

$1,200

Post-Split

24

$50

$1,200

 

Seven Forward Splits
Additionally, Direxion will execute forward splits of the Direxion Daily S&P 500® Bull 3X Shares, Direxion Daily Latin America Bull 3X Shares, Direxion Daily Small Cap Bull 3X Shares, Direxion Daily Russia Bull 3X Shares, Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 3X Shares, Direxion All Cap Insider Sentiment Shares, Direxion NASDAQ-100 Equal Weighted Index Shares.

A summary of the seven ETFs undergoing forward splits is as follows:

 

Fund Name

Ticker

Forward Split
Ratio

Approximate increase in
total number of
outstanding shares

Direxion Daily S&P 500® Bull 3X Shares

SPXL

4 for 1

300%

Direxion Daily Latin America Bull 3X Shares

LBJ

4 for 1

300%

Direxion Daily Small Cap Bull 3X Shares

TNA

2 for 1

100%

Direxion Daily Russia Bull 3X Shares

RUSL

2 for 1

100%

Direxion Daily S&P Oil & Gas Exp. & Prod.
Bull 3X Shares

GUSH

2 for 1

100%

Direxion All Cap Insider Sentiment Shares

KNOW

2 for 1

100%

Direxion NASDAQ-100 Equal Weighted Index
Shares

QQQE

2 for 1

100%

 

As a result of these share splits, shareholders of each Fund will receive two or four shares for each share held of the applicable Fund as indicated in the table above.  Accordingly, the number of each Fund's issued and outstanding shares will increase by the approximate percentage indicated above. 

All share splits will apply to shareholders of record as of the close of NYSE Arca, Inc. (the "NYSE Arca") on April 27, 2017 (the "Record Date"), payable after the close of the NYSE Arca on the payable date, April 28, 2017.  Shares of the Funds will begin trading on the NYSE Arca on a split-adjusted basis on May 1, 2017 (the "Ex-Date").  On the Ex-Date, the opening market value of each Fund's issued and outstanding shares, and thus a shareholder's investment value, will not be affected by the share split.  However, the per share net asset value ("NAV") and opening market price on the Ex-Date will be approximately one-half or one-fourth for the Funds.  The tables below illustrate the effect of a hypothetical two-for-one and four-for-one split on a shareholder's investment.

 

2-for-1 Share Split

Period

# of Shares Owned

Hypothetical NAV

Total Market Value

Pre-Split

100

$20

$2,000

Post-Split

200

$10

$2,000

 

4-for-1 Share Split

Period

# of Shares Owned

Hypothetical NAV

Total Market Value

Pre-Split

100

$40

$4,000

Post-Split

400

$10

$4,000

 

Redemption of Fractional Shares and Tax Consequences for Each Reverse and Forward Split
As a result of the reverse or forward split, a shareholder of a Fund's shares could potentially hold a fractional share. However, fractional shares cannot trade on the NYSE Arca. Thus, a Fund will redeem for cash a shareholder's fractional shares at the Fund's split-adjusted NAV as of the Record Date. Such redemption may have tax implications for those shareholders and a shareholder could recognize a gain or loss in connection with the redemption of the shareholder's fractional shares. Otherwise, the reverse or forward split will not result in a taxable transaction for holders of Fund shares. No transaction fee will be imposed on shareholders for such redemption.

"Odd Lot Unit"
Also as a result of the reverse or forward split, the Funds will have outstanding one aggregation of less than 50,000 shares to make a creation unit, or an "odd lot unit." Thus, the Funds will provide one authorized participant with a one-time opportunity to redeem the odd lot unit at the split-adjusted NAV or the NAV on such date the authorized participant seeks to redeem the odd lot unit.

About Direxion:

Direxion builds bold products for investors who want more than the status quo. Our index-based products deliver directional options, magnified exposure, and long-term, rules-based strategies. Founded in 1997, the company has approximately $11.2 billion in assets under management as of December 31, 2016. Direxion's diverse suite of products helps investors navigate today's ever-changing markets. For more information, please visit www.direxioninvestments.com.

There is no guarantee that the Funds will achieve their objectives.

For more information on all Direxion Shares daily leveraged ETFs, go to direxioninvestments.com, or call us at 866.476.7523.

The ETFs are not suitable for all investors and should be utilized only by investors who understand the risks associated with seeking daily leveraged and inverse investment results, and intend to actively monitor and manage their investments. Due to the daily nature of the leveraged and inverse investment strategies employed, there is no guarantee of long-term inverse returns. Past performance is not indicative of future results.

An investor should consider the investment objectives, risks, charges, and expenses of Direxion ETFs carefully before investing. The prospectus and summary prospectus contains this and other information about Direxion ETFs. Download a prospectus and summary prospectus at direxioninvestments.com. The prospectus and summary prospectus should be read carefully before investing.

Risks:

An investment in the ETFs involves risk, including the possible loss of principal. The ETFs are non-diversified and include risks associated with concentration risk that results from the Funds' investments in a particular industry or sector which can increase volatility. The use of derivatives such as futures contracts, forward contracts, options and swaps are subject to market risks that may cause their price to fluctuate over time. The Funds do not attempt to, and should not be expected to, provide returns which are a multiple of the return of the Index for periods other than a single day. For other risks including correlation, compounding, market volatility and specific risks regarding each sector, please read the prospectus.

Distributor: Foreside Fund Services, LLC.

 

CONTACT:

James Doyle


JConnelly


973.850.7308


jdoyle@jconnelly.com

 

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