Nortel Shareholders to Vote on Reverse Stock Split Proposal

6:30 am on February 19, 2006 | Category: Business

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Nortel Networks executives have made plans to submit a special proposal for a reverse stock split at the company’s annual general meeting.

A reverse split would involve the consolidation of shares, resulting in a lower number of total shares at a higher price. In theory, the higher price could attract more institutional investors, and provide current shareholders with greater liquidity.

If this resolution is approved by shareholder at the May 2 meeting, Nortel’s board of directors will have the authority to perform the reverse split at any time prior to April 11, 2007.

Nortel stocks hit a high of $124.50 in July 2000, but have collapsed in value over the past few years. They are currently worth just $3.38 on the Toronto Stock Exchange.

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    Edited by Jeremy Maddock