Presstek shareholders OK reverse split plan



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Shareholders at Presstek Inc. overwhelmingly gave the company's board of directors the right to issue up to a 1-to-15 reverse stock split, according to a filing with the U.S. Securities and Exchange Commission.In a vote taken on June 12, holders of 31.7 million shares voted in favor of the split, while the owners of 2.9 million shares voted against the proposal.In its April proxy, Presstek explained that it might need the split in order to boost its share price and prevent being delisted by the Nasdaq exchange.The reverse split merges shares of stock, reducing the number of shares issued, which would theoretically increase the share price proportionately. However, it doesn't always work that way because sometimes the market frowns on such moves.The maker of printing equipment - now based in Connecticut but with a major facility in Hudson -- has been struggling, losing $23 million in the last two full years, thanks to a lackluster economy and the move away from print media.In its first quarter, the company lost another $1.2 million, and revenue slipped 18 percent compared to the same quarter the year before.Lately, the share price has been hovering around and below 50 cents. Nasdaq requires that companies listed on its exchange trade for more than $1 a share and it has notified Presstek that it was no longer in compliance with that rule.With the stock split plan, the company has until October for the price to rise.Even with shareholder approval, the board of directors is not obligated to initiate the reverse split - and the ratio of the split could vary from 1-to-2 all the way to 1-to-15 If the board does go through with it, no fractional shares will be issued.Shareholders will get cash for those shares instead. - BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

 

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