NEW YORK - Chimera Investment Corporation (NYSE:CIM) has announced that its Board of Directors has approved a reverse stock split of its common stock at a 1-for-3 ratio. This corporate action is slated to occur after the market closes on May 21, 2024, with the consolidated shares set to commence trading on the New York Stock Exchange under a new CUSIP number the following day.
The reverse stock split aims to reduce the number of Chimera's outstanding common shares from approximately 241.4 million to roughly 80.5 million. The authorized shares will also decrease from 500 million to 166.7 million. According to the company, this move is intended to align its share count with peers of similar market capitalization and potentially lessen share price volatility, thereby making the stock more appealing to a broader investor base.
As part of the reverse split, no fractional shares will be issued. Shareholders who would otherwise receive a fractional share will be compensated with cash based on the closing stock price on May 21, 2024. This change will not materially affect any shareholder's percentage of ownership, barring minimal adjustments due to the cash payouts for fractional shares.
Shareholders with physical stock certificates will be provided with a letter of transmittal from Computershare Trust Company, N.A., the company's transfer agent, detailing the process for exchanging their shares. Those with book-entry shares or shares held through a bank or broker will not need to take any action to effectuate the reverse stock split.
Chimera is a real estate investment trust primarily focused on a diversified portfolio of mortgage assets. The company's portfolio includes residential mortgage loans, Agency RMBS, Non-Agency RMBS, Agency CMBS, and other real estate-related securities
InvestingPro Insights
As Chimera Investment Corporation (NYSE:CIM) gears up for its reverse stock split, investors are keeping a close eye on the company's financial health and market performance. According to InvestingPro data, Chimera's market capitalization stands at a solid $1.11 billion USD. The firm's Price-to-Earnings (P/E) ratio is currently at 8.66, reflecting an adjusted P/E ratio of 9.03 for the last twelve months as of Q1 2024. This valuation metric is complemented by a notably low PEG ratio of 0.06 for the same period, suggesting potential for growth at a reasonable price.
InvestingPro Tips highlight that Chimera has seen a significant return over the last week, with a 1-week price total return of 8.78%. This short-term performance is part of a broader trend, as the company has also achieved a strong return over the last month, with a 1-month price total return of 14.88%. Importantly for income-focused investors, Chimera pays a significant dividend, boasting a dividend yield of 9.34% as of the latest data, and has maintained dividend payments for an impressive 18 consecutive years.
For those considering a deeper dive into Chimera's financials and future prospects, there are additional InvestingPro Tips available, which can be accessed through InvestingPro's dedicated company page at https://www.investing.com/pro/CIM. Currently, there are 5 more tips listed that could provide further insights into the company's performance and outlook. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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