FOR IMMEDIATE RELEASE
BOSTON – March 15, 2013 – Direxion, a leader in
alternative investment solutions, has announced it will execute reverse
share splits for eight of its leveraged exchange-traded funds (“ETFs”),
as well as forward share splits for another eight leveraged 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.
The firm will execute a 1-for-6 reverse split of the shares of the
Direxion Daily Energy Bear 3X Shares (ERY) and a 1-for-5 reverse split
of the shares of the Direxion Daily China Bear 3X Shares (YANG),
Direxion Daily Emerging Markets Bear 3X Shares (EDZ), Direxion Daily
Technology Bear 3X Shares (TECS) and Direxion Daily Gold Miners Bull 3X
Shares (NUGT) for shareholders of record after the close of the markets
on Monday, April 1, 2013. The firm will also execute a 1-for-4 reverse
split of the shares of the Direxion Daily Financial Bear 3X Shares (FAZ)
and Direxion Daily Small Cap Bear 3X Shares (TZA), and a 1-for-3
reverse split of the shares of the Direxion Daily Mid Cap Bear 3X Shares
(MIDZ) for shareholders of record after the close of the markets on
Monday, April 1, 2013.
A summary of the eight ETFs undergoing reverse splits is as follows: (Please note the CUSIP changes, effective April 2, 2013)
| ETF |
CURRENT CUSIP |
NEW CUSIP |
RATIO |
| Direxion Daily Energy Bear 3X Shares (ERY) |
25459W342 |
25459Y454 |
1:6 |
| Direxion Daily China Bear 3X Shares (YANG) |
25459W763 |
25459Y462 |
1:5 |
| Direxion Daily Emerging Markets Bear 3X Shares (EDZ) |
25459W482 |
25459Y470 |
1:5 |
| Direxion Daily Technology Bear 3X Shares (TECS) |
25459W318 |
25459Y439 |
1:5 |
| Direxion Daily Gold Miners Bull 3X Shares (NUGT) |
25459W250 |
25459Y496 |
1:5 |
| Direxion Daily Financial Bear 3X Shares (FAZ) |
25459W144 |
25459Y447 |
1:4 |
| Direxion Daily Small Cap Bear 3X Shares (TZA) |
25459W110 |
25459Y488 |
1:4 |
| Direxion Daily Mid Cap Bear 3X Shares (MIDZ) |
25459W136 |
25459Y421 |
1:3 |
Additionally, Direxion will execute a 3-for-1 forward split of the
shares of the Direxion Daily Financial Bull 3X Shares (FAS), Direxion
Daily Retail Bull 3X Shares (RETL), Direxion Daily Emerging Markets Bull
3X Shares (EDC) and Direxion Daily S&P 500 Bull 3X Shares (SPXL),
and a 2-for-1 forward split of the shares of the Direxion Daily Real
Estate Bull 3X Shares (DRN), Direxion Daily Latin America Bull 3X Shares
(LBJ), Direxion Daily 7-10 Year Treasury Bull 3X Shares (TYD) and
Direxion Daily Small Cap Bull 3X Shares (TNA) according to the following
schedule:
- Record Date: Thursday, March 28th, 2013
- Payable Date: Monday, April 1st, 2013
- Ex-Date: Tuesday, April 2nd, 2013
A summary of the eight ETFs undergoing forward splits is as follows: (CUSIPs remain the same)
| ETF |
CURRENT CUSIP |
RATIO |
| Direxion Daily Financial Bull 3X Shares (FAS) |
25459Y694 |
3:1 |
| Direxion Daily Retail Bull 3X Shares (RETL) |
25459W417 |
3:1 |
| Direxion Daily Emerging Markets Bull 3X Shares (EDC) |
25459Y686 |
3:1 |
| Direxion Daily S&P 500 Bull 3X Shares (SPXL) |
25459W862 |
3:1 |
| Direxion Daily Real Estate Bull 3X Shares (DRN) |
25459W755 |
2:1 |
| Direxion Daily Latin America Bull 3X Shares (LBJ) |
25459Y652 |
2:1 |
| Direxion Daily 7-10 Year Treasury Bull 3X Shares (TYD) |
25459W565 |
2:1 |
| Direxion Daily Small Cap Bull 3X Shares (TNA) |
25459W847 |
2:1 |
Shareholders of record as of the close of business on Thursday, March
28th 2013, should expect to receive the additional shares after the
close of business on the Payable Date, Monday, April 1st 2013. The
shares are expected to trade at post-split prices beginning on the Ex
Date, Tuesday, April 2nd 2013. Those purchasing shares that do not
settle before the Record Date, but that are purchased between March
26th, 2013 and April 1st 2013 (inclusive), and do not sell their shares
prior to April 2nd 2013, will be entitled to receive the additional
shares, which they will receive on or about, April 4th 2013. As stated
previously, the total market value of the shares outstanding will not be
affected as a result of the reverse and forward splits, except with
respect to the redemption of fractional shares, as outlined below.
The Depository Trust Company (“DTC”), the registered owner of all ETF
shares, has been notified of the reverse and forward splits and has
been instructed to adjust each shareholder’s investment accordingly.
Hypothetical Example of 1-for-6 reverse split:
1-for-6 Reverse Split
| Period |
# of Shares Owned |
Hypothetical Market Price |
Total Share Value |
| Pre-Split |
120 |
$10 |
$1,200 |
| Post-Split |
20 |
$60 |
$1,200 |
Hypothetical Example of 3-for-1 forward split:
3-for-1 Forward Split
| Period |
# of Shares Owned |
Hypothetical Market Price |
Total Share Value |
| Pre-Split |
30 |
$30 |
$900 |
| Post-Split |
90 |
$10 |
$900 |
Redemption of Fractional Shares and Tax Consequences for each Reverse and Forward Split
As a result of the reverse and forward splits, a shareholder of each
ETF could potentially hold a fractional share. However, fractional
shares cannot trade on NYSE Arca. Thus, each ETF will redeem for cash a
shareholder’s fractional shares at the Fund’s split-adjusted NAV. Such
redemptions could cause a shareholder to realize a gain or loss.
Otherwise, the reverse and forward splits will not result in a taxable
transaction for holders of ETF shares. No transaction fee will be
imposed on shareholders for such redemptions.
“Odd Lot” Unit
As a result of the reverse and forward splits, the ETFs will have
outstanding one aggregation of less than 50,000 shares to make a
creation unit, or an “odd lot unit.” Thus, each ETF will provide one
authorized participant with a one-time opportunity to redeem the
respective odd lot unit at its split-adjusted NAV, or at the NAV on such
date the authorized participant seeks to redeem the odd lot unit.
Posts
