XChange TEC.INC Announces Plan to Implement ADS Ratio Change

Rhea-AI Summary

XChange TEC (NASDAQ: XHG) announced plans to modify its American Depositary Shares (ADS) ratio from 1 ADS representing 600,000 Class A ordinary shares to 1 ADS representing 12,000,000 Class A ordinary shares. This change, effective November 8, 2024, will function like a 1-for-20 reverse ADS split. ADS holders must exchange every 20 old ADSs for 1 new ADS through The Bank of New York Mellon. The stock will continue trading under 'XHG' on Nasdaq. Fractional ADSs will be sold, with net proceeds distributed to holders.

Positive

• None.

Negative

• Implementation of reverse ADS split (1:20) could signal potential share price concerns
• Mandatory exchange requirement may cause inconvenience to shareholders
• No guarantee that post-split ADS price will maintain proportional value

News Market Reaction – XHG

-7.52%

1 alert

-7.52% News Effect

On the day this news was published, XHG declined 7.52%, reflecting a notable negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

SHANGHAI, Nov. 4, 2024 /PRNewswire/ -- XChange TEC.INC (NASDAQ: XHG) (the "Company") today announced that it plans to change the ratio of the American depositary shares ("ADSs") representing its Class A ordinary shares from one (1) ADS representing six hundred thousand (600,000) Class A ordinary share to one (1) ADS representing twelve million (12,000,000) Class A ordinary shares.

For the ADS holders, the change in the ADS ratio will have the same effect as a one-for-twenty reverse ADS split. There will be no change to the Company's Class A ordinary shares. The effect of the ratio change on the ADS trading price on The Nasdaq Capital Market is expected to take place at the open of trading on November 8, 2024 (U.S. Eastern Time) (the "Effective Date"). Holder of ADSs will be required on a mandatory basis to surrender their old ADSs to the Company's depositary, The Bank of New York Mellon (the "Depositary"), in exchange for every twenty (20) then-held (old) ADSs to receive one (1) new ADS. The ADSs will continue to be traded on The Nasdaq Capital Market under the symbol "XHG."

No fractional new ADSs will be issued in connection with the change in the ADS ratio. Instead, fractional entitlements to new ADSs will be aggregated and sold by the Depositary and the net cash proceeds from the sale of the fractional ADS entitlements (after deduction of fees, taxes and expenses) will be distributed to the applicable ADS holders by the Depositary.

As a result of the change in the ADS ratio, the ADS price is expected to increase proportionally, although the Company can give no assurance that the ADS price after the change in the ADS ratio will be equal to or greater than twenty times the ADS price before the change.

View original content:https://www.prnewswire.com/news-releases/xchange-tecinc-announces-plan-to-implement-ads-ratio-change-302295207.html

SOURCE XChange TEC.INC

FAQ

When will XHG's ADS ratio change take effect?

The ADS ratio change for XChange TEC (XHG) will take effect at the open of trading on November 8, 2024 (U.S. Eastern Time).

What is the new ADS ratio for XHG stock?

The new ratio will be 1 ADS representing 12,000,000 Class A ordinary shares, changed from 1 ADS representing 600,000 Class A ordinary shares.

How will XHG's ADS ratio change affect current shareholders?

Shareholders will need to exchange every 20 old ADSs for 1 new ADS. Fractional shares will be sold and proceeds distributed to affected holders.

Will XHG's stock symbol change after the ADS ratio modification?

No, XChange TEC will continue trading under the symbol 'XHG' on The Nasdaq Capital Market.