New York Community Bancorp, Inc. (NYCB) said it will go ahead with a 1🐲-for-3 reverse stock split sometime mid-to-late July, after i⛦ts board approved the move Wednesday.

The 澳洲幸运5官方开奖结果体彩网:troubled lender's shareholders had given a greenlight to the reverse stock split during the annual meeting on June 5.

Why Do Companies Do Reverse Stock Splits?

A 澳洲幸运5官方开奖结果体彩网:reverse stock split is a corporate action 🎃in which a publicly traded company will reduce the number of its shares on the market and available for trading, while boosting its stock price and maintainin꧙g its market valuation.

For example, if a company has 10 shares, worth $10 each, its 澳洲幸运5官方开奖结果体彩网:market capitalization would be $100 (10x$10). If it carries out a 1-for-2 reverse stock split, it would have 5 shares, worth $20 at the time of the s✱plit while the market cap remains steady at $100.

Companies may carry out reverse stock splits when they need to boost their share price to attract investors who may be wary of buying the stock if it's priced too low or even for certain compliance reasons. For example, EV-maker Nikola Corp. (NKLA) enacted a 1-for-30 reverse stock split on June 24 to avoid a 澳洲幸运5官方开奖结果体彩网:delisting from the Nasdaq.

It is pretty much the opposite of a 澳洲幸运5官方开奖结果体彩网:stock split, which companies do in order to increase the number of shares in the market, and reduce their price so that more investors can afford to buy the stock. Companies that recently undertook stock splits include Chipotle (CMG), Nvidia (NVDA), Amazon (AMZN) and Walmart (WMT).

NYCB Has Struggled

Shares of NYCB, which fell 0.7% to finish Thursday's session at $3.04, have lost around 70% of their value year-to-date.

Concerns about the bank's operations and 🅺its commercial real estate loa🌞n portfolio—especially multi-family homes—have relegated its shares to 澳洲幸运5官方开奖结果体彩网:penny-stocks status.

At the end of the first quarter, two credit agencies downgraded the bank, citing "material weaknesses" in controls, while the company reported a surprise write-off of a $2.4 billion loss and sacked its chief executive of nearly 30 years. The company also received a 澳洲幸运5官方开奖结果体彩网:$1 billion cash injection from a ℱconsortium of lenders to shore up its balanceℱ sheet.

The lender also acquired assets of the failed 澳洲幸运5官方开奖结果体彩网:Signature Bank last year, pushing its combined assets over $100 billion and attracting greater regulatory scrutiny.