- XChange TEC.INC (XHG, Financial) announces a 1-for-20 reverse ADS split effective May 9, 2025.
- The new ADS ratio will be 1 ADS representing 2,400 Class A ordinary shares, up from 1:120.
- The trading symbol "XHG" on Nasdaq remains unchanged despite the ratio change.
XChange TEC.INC (XHG), listed on Nasdaq, has announced a significant change to its American Depositary Shares (ADS) ratio. The company will implement a 1-for-20 reverse ADS split, altering the existing ratio from 1 ADS representing 120 Class A ordinary shares to 1 ADS representing 2,400 Class A ordinary shares. This adjustment is scheduled to take effect on May 9, 2025.
As part of this change, current holders of ADSs will be required to surrender their existing shares to The Bank of New York Mellon, the company's depositary. For every 20 old ADSs surrendered, holders will receive 1 new ADS. It's important to note that while the ADS ratio is changing, the underlying Class A ordinary shares of XChange TEC.INC will remain unchanged.
Fractional new ADSs will not be issued. Instead, any fractional entitlements will be aggregated and sold, with the proceeds distributed to the affected holders after fees and taxes. The company anticipates that this ratio change should be price-neutral; theoretically, if an ADS was valued at $5, it should be worth $100 post-split. However, XChange TEC.INC advises that there is no guarantee that the ADS price will precisely reflect this new value ratio immediately following the change.
This strategic move could potentially aid in meeting Nasdaq's listing requirements and may attract institutional investors who often have minimum price conditions for their investments. XChange TEC.INC's market capitalization, business operations, and financial status will not be impacted by this technical adjustment.
