Direxion Announces Reverse And Forward Share Splits Of 16 ETFs
by PR Newswire
BOSTON, March 15, 2013 /PRNewswire/ -- Direxion, a leader in alternative investment solutions, has announced it will execute reverse share splits for eight of its leveraged exchange-traded funds ("ETFs"), as well as forward share splits for another eight leveraged ETFs. The total market value of the shares outstanding will not be affected as a result of these splits, except with respect to the redemption of fractional shares, as outlined below.
The firm will execute a 1-for-6 reverse split of the shares of the Direxion Daily Energy Bear 3X Shares (ERY) and a 1-for-5 reverse split of the shares of the Direxion Daily China Bear 3X Shares (YANG), Direxion Daily Emerging Markets Bear 3X Shares (EDZ), Direxion Daily Technology Bear 3X Shares (TECS) and Direxion Daily Gold Miners Bull 3X Shares (NUGT) for shareholders of record after the close of the markets on Monday, April 1, 2013. The firm will also execute a 1-for-4 reverse split of the shares of the Direxion Daily Financial Bear 3X Shares (FAZ) and Direxion Daily Small Cap Bear 3X Shares (TZA), and a 1-for-3 reverse split of the shares of the Direxion Daily Mid Cap Bear 3X Shares (MIDZ) for shareholders of record after the close of the markets on Monday, April 1, 2013.
A summary of the eight ETFs undergoing reverse splits is as follows (Please note the CUSIP changes, effective April 2, 2013):
Direxion Daily Energy Bear 3X Shares (ERY)
Direxion Daily China Bear 3X Shares (YANG)
Direxion Daily Emerging Markets Bear 3X Shares (EDZ)
Direxion Daily Technology Bear 3X Shares (TECS)
Direxion Daily Gold Miners Bull 3X Shares (NUGT)
Direxion Daily Financial Bear 3X Shares (FAZ)
Direxion Daily Small Cap Bear 3X Shares (TZA)
Direxion Daily Mid Cap Bear 3X Shares (MIDZ)
Additionally, Direxion will execute a 3-for-1 forward split of the shares of the Direxion Daily Financial Bull 3X Shares (FAS), Direxion Daily Retail Bull 3X Shares (RETL), Direxion Daily Emerging Markets Bull 3X Shares (EDC) and Direxion Daily S&P 500 Bull 3X Shares (SPXL), and a 2-for-1 forward split of the shares of the Direxion Daily Real Estate Bull 3X Shares (DRN), Direxion Daily Latin America Bull 3X Shares (LBJ), Direxion Daily 7-10 Year Treasury Bull 3X Shares (TYD) and Direxion Daily Small Cap Bull 3X Shares (TNA) according to the following schedule:
Record Date: Thursday, March 28th, 2013
Payable Date: Monday, April 1st, 2013
Ex-Date: Tuesday, April 2nd, 2013
A summary of the eight ETFs undergoing forward splits is as follows (CUSIPs remain the same):
Direxion Daily Financial Bull 3X Shares (FAS)
Direxion Daily Retail Bull 3X Shares (RETL)
Direxion Daily Emerging Markets Bull 3X Shares (EDC)
Direxion Daily S&P 500 Bull 3X Shares (SPXL)
Direxion Daily Real Estate Bull 3X Shares (DRN)
Direxion Daily Latin America Bull 3X Shares (LBJ)
Direxion Daily 7-10 Year Treasury Bull 3X Shares (TYD)
Direxion Daily Small Cap Bull 3X Shares (TNA)
Shareholders of record as of the close of business on Thursday, March 28th 2013, should expect to receive the additional shares after the close of business on the Payable Date, Monday, April 1st 2013. The shares are expected to trade at post-split prices beginning on the Ex Date, Tuesday, April 2nd 2013. Those purchasing shares that do not settle before the Record Date, but that are purchased between March 26th, 2013 and April 1st 2013 (inclusive), and do not sell their shares prior to April 2nd 2013, will be entitled to receive the additional shares, which they will receive on or about, April 4th 2013. As stated previously, the total market value of the shares outstanding will not be affected as a result of the reverse and forward splits, except with respect to the redemption of fractional shares, as outlined below.
The Depository Trust Company ("DTC"), the registered owner of all ETF shares, has been notified of the reverse and forward splits and has been instructed to adjust each shareholder's investment accordingly.
Hypothetical Example of 1-for-6 reverse split:
1-for-6 Reverse Split
# of Shares Owned
Hypothetical Market Price
Total Share Value
Hypothetical Example of 3-for-1 forward split:
3-for-1 Forward Split
# of Shares Owned
Hypothetical Market Price
Total Share Value
Redemption of Fractional Shares and Tax Consequences for each Reverse and Forward Split
As a result of the reverse and forward splits, a shareholder of each ETF could potentially hold a fractional share. However, fractional shares cannot trade on NYSE Arca. Thus, each ETF will redeem for cash a shareholder's fractional shares at the Fund's split-adjusted NAV. Such redemptions could cause a shareholder to realize a gain or loss. Otherwise, the reverse and forward splits will not result in a taxable transaction for holders of ETF shares. No transaction fee will be imposed on shareholders for such redemptions.
"Odd Lot" Unit
As a result of the reverse and forward splits, the ETFs will have outstanding one aggregation of less than 50,000 shares to make a creation unit, or an "odd lot unit." Thus, each ETF will provide one authorized participant with a one-time opportunity to redeem the respective odd lot unit at its split-adjusted NAV, or at the NAV on such date the authorized participant seeks to redeem the odd lot unit.
For more information about Direxion, please contact James Doyle at 973-850-7308 or firstname.lastname@example.org.
Direxion Funds and Direxion Shares, managed by Rafferty Asset Management, LLC, offer leveraged index funds, ETFs and alternative-class fund products for investment advisors and sophisticated investors who seek to effectively manage risk and return in both bull and bear markets. Founded in 1997, the company has approximately $7 billion in assets under management as of 12/31/12. The company's business model is built on continuous product innovation, exceptional customer service and a commitment to building strategic relationships with distribution partners. For more information, please visit www.direxionfunds.com.
There is no guarantee that the funds will achieve their objectives.
For more information on all Direxion Shares daily leveraged ETFs, go to www.direxionshares.com, or call us at 866.476.7523.
The ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged investment results and intend to actively monitor and manage their investments. Due to the daily nature of the leverage employed, there is no guarantee of amplified long-term returns. Past performance is not indicative of future results.
An investor should consider the investment objectives, risks, charges, and expenses of Direxion Shares carefully before investing. The prospectus and summary prospectus contains this and other information about Direxion Shares. Download a prospectus and summary prospectus at www.direxionshares.com. The prospectus and summary prospectus should be read carefully before investing.
Investing in the funds may be more volatile than investing in broadly diversified funds. The use of leverage by a fund increases the risk to the fund. The more a fund invests in leveraged instruments the more the leverage will magnify gains or losses on those investments. There is no assurance that the Funds will achieve their objectives and an investment in a Fund could lose money. No single Fund is a complete investment program. The Funds are not designed to, and will not necessarily, track the underlying index or benchmark over a longer period of time. One cannot invest directly in an index.
An investment in the Funds involves risk, including the possible loss of principal. The Funds are non-diversified and include concentration risk that results from the Funds' investments in a particular industry or sector which can increase volatility. The use of derivatives such as futures contracts, forward contracts, options and swaps are subject to market risks that may cause their price to fluctuate over time. The Fund does not attempt to, and should not be expected to, provide returns which are a multiple of the return of the Index for periods other than a single day. For other risks including correlation, leverage, compounding, market volatility and specific risks regarding each sector, please read the prospectus.
Distributor: Foreside Fund Services, LLC.