Wheeler REIT Announces Reverse Stock Split

Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR) has filed a Form 8-K with the Securities and Exchange Commission announcing a one-for-five reverse stock split of its common stock, effective March 26, 2025. The Virginia-based real estate investment trust, specializing in commercial properties, stated that the reverse stock split will be implemented at 5:00 p.m. Eastern Time on the said date. The announcement comes as the company’s stock, currently trading at $1.11, has experienced significant volatility, with InvestingPro data showing a 99% decline over the past year and trading volume averaging 1.3 million shares daily.

The reverse split will reduce the number of shares a stockholder owns, but will not alter their proportional ownership in the company, except for minor adjustments due to the cash payment in lieu of issuing fractional shares. No fractional shares will be issued; instead, shareholders will receive a cash payment equivalent to the fraction of the share multiplied by the closing price of Wheeler’s common stock on The Nasdaq Capital Market on March 26, 2025, adjusted for the split. According to InvestingPro analysis, Wheeler currently shows signs of being undervalued, with a strong current ratio of 2.18 indicating solid short-term liquidity. Subscribers to InvestingPro can access 12 additional key insights about Wheeler’s financial health and market position.

At the opening of the market on Sunday, March 27, 2025, Wheeler’s common stock will trade on a split-adjusted basis under a new CUSIP number. The company’s trading symbol will remain the same. The reverse stock split will also result in a proportional adjustment to the outstanding partnership units of Wheeler REIT, L.P. With a market capitalization of just $1.29 million and a beta of 1.64, the stock has demonstrated significant price sensitivity to market movements, making it crucial for investors to monitor technical indicators and market trends closely.

The reverse stock split will affect the convertible securities of the company, including the 7.00% subordinated convertible notes due 2031, which will see an adjusted conversion rate. Similarly, the conversion prices for the Series B Convertible Preferred Stock and Series D Cumulative Convertible Preferred Stock will be proportionally increased.

Additionally, the reverse stock split will prompt adjustments to the number of shares authorized for issuance under the company’s incentive plans, as well as the terms and conditions of any outstanding equity awards.

This corporate action is based on amendments to the company’s Articles of Incorporation filed with the State Department of Assessments and Taxation of Maryland. The amendments include the reverse stock split and a decrease in the par value of the common stock from $0.05 to $0.01 per share, effective one minute after the reverse split.

Wheeler REIT’s forward-looking statements indicate that the reverse stock split is aimed at impacting the trading price of the common stock, although they caution that such statements are subject to risks and uncertainties.

The information presented in this article is based on Wheeler Real Estate Investment Trust’s recent SEC filing.

In other recent news, Wheeler Real Estate Investment Trust, Inc. has made several adjustments to its financial instruments and capital structure. The company announced an adjustment to the conversion price of its 7.00% Subordinated Convertible Notes due 2031, following the redemptions of its Series D Cumulative Convertible Preferred Stock. The conversion price was lowered to approximately $0.91 per share, allowing for about 27.41 shares of common stock for each $25.00 of principal amount. Additionally, Wheeler REIT completed a one-for-four reverse stock split of its common stock, which took effect on January 28, 2025. This move also led to adjustments in the conversion rates for various convertible securities and preferred stocks.

Moreover, Wheeler REIT conducted an unregistered equity swap with preferred stockholders, issuing 1,071,200 shares of common stock in exchange for shares of its Series D and Series B Convertible Preferred Stock. This transaction, aimed at managing the company’s capital structure, did not involve any cash proceeds. The company has also been actively processing redemption requests for its Series D Preferred Stock, issuing significant amounts of common stock in settlement. These developments are part of Wheeler REIT’s ongoing efforts to restructure its financial framework and provide liquidity to its stakeholders.

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