Marin Software’s Stockholders and Board of Directors Approve Reverse Stock Split
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A reverse stock split is a strategic move that can have significant implications for a company's stock price and market perception. In the case of Marin Software Incorporated, the 1-for-6 reverse split is aimed at reducing the number of outstanding shares, which could potentially increase the stock price by a factor of six. However, this does not inherently add value to the company and should not be mistaken for an improvement in the underlying business fundamentals.
From a financial analysis standpoint, the reduction in the number of authorized shares appears to be a measure to prevent dilution post-split. This could be viewed positively by investors who are concerned about share value erosion. However, the immediate impact on liquidity must be considered, as the reduced number of shares may result in lower trading volumes and potentially higher volatility. Investors should monitor how the market reacts to these changes post-split, as the initial reaction can sometimes differ from the long-term trend.
Marin Software's decision to implement a reverse stock split often reflects a desire to appeal to institutional investors and to comply with stock exchange listing requirements. Companies with higher stock prices are typically seen as more stable and less speculative, which might attract a different investor base. This could also be a preemptive step to stay listed on the Nasdaq, as exchanges often have minimum bid price requirements.
It's important to note that while the ownership percentage for existing shareholders remains unchanged, the psychological impact on retail investors can be significant. Some may perceive the reverse split as a red flag, signaling that the company is struggling to meet listing requirements or trying to artificially inflate its stock price. The market's reception of this reverse split will be a key indicator of investor confidence in Marin's future prospects.
The legal implications of a reverse stock split include the need for clear communication and adherence to regulatory requirements. Marin Software has followed due process by gaining stockholder approval and providing detailed information in its definitive proxy statement. The company must ensure that the execution of the reverse stock split complies with SEC regulations, state corporate laws and Nasdaq listing standards.
For shareholders, the rounding down of fractional shares to cash may have minor tax implications, as these transactions could be considered a realization event. Moreover, the change in CUSIP number is a routine administrative update that signifies the change in the structure of the stock but has no direct legal impact on shareholders or the company's obligations.
Upon the effectiveness of the Reverse Stock Split, every 6 shares of Marin’s issued and outstanding common stock will be automatically combined and converted into one issued and outstanding share of common stock with any fractional amounts rounded down and paid in cash in lieu of the fractional amount. The Reverse Stock Split will reduce the number of shares of outstanding common stock from approximately 18.4 million to approximately 3.1 million. The Reverse Stock Split will not affect any stockholder’s ownership percentage of Marin’s common stock.
At the opening of trading on April 15, 2024, Marin’s common stock will continue to trade on the Nasdaq Capital Market under the symbol “MRIN,” but will be assigned a new CUSIP number (56804T 304) and will trade on a split-adjusted basis.
Broadridge Corporate Issuer Solutions, Inc., Marin’s transfer agent, will provide instructions to registered stockholders regarding the process for exchanging their stock certificates. Stockholders holding their shares in street name do not need to take any action. Additional information regarding the reverse stock split and reduction in the number of authorized shares of Marin’s common stock approved by stockholders can be found in Marin’s definitive proxy statement filed with the Securities and Exchange Commission on March 5, 2024, as amended on March 28, 2024.
About Marin Software
Marin Software Incorporated’s mission is to give advertisers the power to drive higher efficiency and transparency in their paid marketing programs that run on the world’s largest publishers. Marin Software offers a unified SaaS advertising management platform for search, social, and eCommerce advertising. Marin Software helps digital marketers convert precise audiences, improve financial performance, and make better decisions. Headquartered in
Forward-Looking Statements
This press release contains forward-looking statements including, among other things, Marin’s expectations regarding the timing of the Reverse Stock Split, when Marin’s common stock will trade on an as-adjusted basis, and when the reduction in authorized shares of Marin’s capital stock will occur. Forward-looking statements involve known and unknown risks, uncertainties and other factors, including Nasdaq’s timing for approval of trading on a split-adjusted basis and the filing of a Certificate of Amendment to our Certificate of Incorporation to effectuate the Reverse Stock Split, that may cause actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. You should refer to the section entitled “Risk Factors” set forth in Marin’s annual and quarterly reports and other filings Marin makes with the Securities and Exchange Commission from time to time for a discussion of important factors that may cause actual results to differ materially from those expressed or implied by Marin’s forward-looking statements. The forward-looking statements speak only as of the date of this Current Report on Form 8-K. Marin undertakes no obligation to publicly update any forward-looking statements or reasons why actual results might differ, whether as a result of new information, future events or otherwise, except as required by law.
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Investor Relations Contact:
Investor Relations, Marin Software
ir@marinsoftware.com
Media Contact:
Wesley MacLaggan
Marketing, Marin Software
(415) 399-2580
press@marinsoftware.com
Source: Marin Software Incorporated
