Direxion announces forward and reverse splits of four ETFs

NEW YORK, September 24, 2021 / PRNewswire / – Direxion has announced that it will conduct forward stock splits for two of its exchange traded funds (“ETFs”), as well as reverse stock splits for two other ETFs. The total market value of the outstanding shares will not be affected by these splits, except with respect to the repurchase of fractional shares, as indicated below.

Front divisions

Direxion will forward the issued and outstanding shares of the Direxion Daily Retail Bull 3X shares and the Direxion Daily Regional Banks Bull 3X shares (each, a “Fund” and collectively, the “Funds”).

After the markets close on 22 October 2021 (the “Payment Date”) funds affecting forward splits of their issued and outstanding shares as follows:

Fund name

Teleprinter

Front sharing ratio

Approximate increase in the total number of shares outstanding

Direxion Daily Retail Bull 3X Actions

RETL

5 for 1

400%

Direxion Daily Regional banks Shares Bull 3X

DPST

5 for 1

400%

As a result of such stock splits, shareholders of each Fund will receive five shares for each share held of the relevant Fund, as shown in the table above. Accordingly, the number of issued and outstanding shares of each Fund will increase by the approximate percentage indicated above.

All stock splits will apply to shareholders of record at the close of NYSE Arca, Inc. (the “NYSE Arca”) on 21 October 2021 (the “Record Date”), payable after the close of NYSE Arca on the Payment Date. Shares of the Funds will begin to trade on NYSE Arca on a split-adjusted basis on 25 October 2021 (the “Secondment Date”). On the ex-date, the opening market value of the issued and outstanding shares of each Fund, and therefore the investment value of a shareholder, will not be affected by the split of the shares. However, the net asset value per share (“NAV”) and the opening market price on the Ex-date will be approximately one-fifth for the Sub-Funds. The table below illustrates the effect of a hypothetical five-to-one split on a shareholder’s investment.

Front split 5 for 1

Period

Number of shares held

Hypothetical NAV

Total market value

Pre-divided

ten

$ 50

$ 500

Post-split

50

$ 10

$ 500

Forward stock splits will not result in a taxable transaction for holders of shares of the Funds. No transaction commission will be charged to shareholders in connection with the stock split.

Inverted splits

Direxion will consolidate the issued and outstanding shares of Direxion Daily MSCI Real Estate Bear 3X shares and Direxion Daily Technology Bear 3X shares (each, a “Fund” and collectively, the “Funds”).

After the markets close on 22 October 2021, each Fund will affect the reverse splits of its issued and outstanding shares as follows:

Fund name

Inverse distribution ratio

Approximate decrease in the total number of shares outstanding

Direxion Daily MSCI Real Estate Bear 3X Actions

1 in 10

90%

Direxion Daily Technology Bear 3X Actions

1 in 10

90%

Please note the CUSIP changes, effective October 25, 2021:

Fund name

Teleprinter

Current CUSIP

New CUSIP

Direxion Daily MSCI Real Estate Bear 3X Actions

DRV

25460E141

25460G419

Direxion Daily Technology Bear 3X Actions

TECS

25460G872

25460G393

As a result of these reverse splits, all ten shares of a Fund will be exchanged for one share as shown in the table above. Accordingly, the total number of issued and outstanding shares for a Fund will decrease by the approximate percentage indicated above. In addition, the net asset value per share (“NAV”) and the opening market price of the following day will be approximately ten 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 25 October 2021.

The next day’s opening market value of the issued and outstanding shares of the Funds, and therefore the investment value of a shareholder, will not be affected by the consolidation. The table below illustrates the effect of a hypothetical one-for-ten split planned for the Funds as described above:

Reverse division 1 to 10

Period

Number of shares held

Hypothetical NAV

Total market value

Pre-divided

100

$ 10

$ 1,000

Post-split

ten

$ 100

$ 1,000

Buyback of Fractional Shares and Tax Consequences of the Reverse Split

Due to reverse splits, a shareholder of a Fund’s shares could potentially hold a fraction of a share. However, fractional shares cannot be traded on the NYSE Arca. Thus, a Fund will redeem fractional shares of a shareholder in cash at the adjusted net asset value of the Fund’s split after market close on 22 October 2021. Such redemption may have tax consequences for such shareholders and a shareholder could recognize a gain or loss in connection with the redemption of fractional shares of the shareholder. Otherwise, reverse splits will not give rise to a taxable transaction for holders of Fund shares. No transaction commission will be charged to shareholders for such redemption.

Unit “odd lots”

Also because of reverse splits, a Fund may have an aggregation of less than 50,000 shares in circulation to constitute a creation unit, or an “odd lot unit”. Thus, a Fund will provide an authorized participant with a unique opportunity to redeem the odd lot unit at the split-adjusted NAV or the net asset value on the date the authorized participant seeks to redeem the odd lot unit.

The Trust’s transfer agent will notify the Depository Trust Company (“DTC”) of the spin-offs and request DTC to adjust the investment (s) of each shareholder accordingly. DTC is the registered owner of the shares of the Funds and maintains a register of owners of the registers of the Funds.

About Direxion:

Direxion offers conviction-driven investors ETF solutions designed for this purpose and refined for precision. These solutions are available to a wide range of investors, whether executing short-term tactical trades or investing in thematic strategies. Direxion’s reputation is built on developing products that accurately express market perspectives and allow investors to manage their exposure to risk. Founded in 1997, the company has approximately $ 26.6 billion in assets under management at June 30, 2021. For more information, please visit www.direxion.com.

There can be no assurance that the Funds will achieve their investment objectives.

For more information on all Direxion Shares Daily Leveraged ETFs, visit direxion.com or call us at 866.301.9214.

Leveraged ETFs are not suitable for all investors and should be used only by investors who understand the risks associated with seeking daily leveraged and reverse investment results and intend to monitor and actively manage their investments. Due to the everyday nature of the leveraged and reverse investment strategies used, there is no guarantee of long term reverse returns. Past performance does not represent future results.

An investor should carefully consider the investment objective, risks, charges and expenses of a Fund before investing. The prospectus and the summary of the prospectus of a Fund contain this information as well as other information about the Direxion Shares. To obtain a Fund’s prospectus and prospectus summary, call 866-716-0735 or visit our website at direxion.com. The prospectus and the summary of the prospectus of a Fund should be read carefully before investing.

Risks associated with Direxion shares – There are risks associated with investing in ETFs, including the possible loss of principal. ETFs are not diversified and involve risks associated with concentration resulting from an ETF’s investments in a particular industry or sector, which can increase volatility. The use of derivative products such as futures and swaps is subject to market risks which may cause their price to fluctuate over time. ETFs do not attempt, and should not be expected, to provide returns that are a multiple of the return of their respective index for periods other than a single day. For other risks, including leverage, correlation, daily mix, market volatility and industry or sector specific risks, please read the prospectus.

Distributor: Foreside Fund Services, LLC.

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