Evergreen Found a Way to Get Back Over $1 per Share

The solution is simple -- reverse stock split.  Evergreen Solar (NASDAQ:ESLR) shareholders will get a one-for-six reverse stock split as the outstanding shares shrink from 450 million to 120 million.

Evergreen (ESLR) shares have been trading below $1 since May 19th, and the company could face de-listing proceedings from the Nasdaq Stock Market if the price doesn’t rise above $1 within 30 days.

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(bizjournals.com) The move would “better enable us to maintain the listing of our common stock on the Nasdaq Global Market and facilitate higher levels of institutional stock ownership, where investment policies generally prohibit investments in lower-priced securities,” Evergreen wrote in the filing.

Except for minimal adjustments that could result from the treatment of fractional shares, the reverse split would not have any dilutive effect on stockholders, and would not impact voting rights, Evergreen wrote. However, Evergreen said it can’t assure shareholders that the reverse split would increase the price of the common stock six times, “or result in any permanent or sustained increase in the market price of our stock.”

Evergreen also said that if the market price declines after the reverse split, the percentage decline may be greater due to a smaller number of outstanding shares. “A reverse stock split is often viewed negatively by the market and, consequently, can lead to a decrease in our overall market capitalization,” Evergreen wrote in the filing.

Stockholders will be asked to approve the reverse split during the annual meeting July 27.

SOURCE: http://www.bizjournals.com/boston/stories/2010/05/24/daily28.html