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The Special Situation In Generex Ends Wednesday

|About: Generex Biotechnology Corporation (GNBT)
Summary

Generex has stated it will pay a 1:1 stock dividend.

Record date for dividend is July 24, 2019.

The company must uplist for dividend to be paid.

Large shareholders have waived the dividend, which means those that get the dividend will benefit.

It appears there is a special situation with respect to a 1:1 stock dividend for Generex (OTCQB:GNBT) previously announced. The record date for the determination of the holders of the GNBT common stock entitled to participate in this 1:1 stock dividend will be Wednesday, July 24, 2019 subject certain conditions.

What makes this special is that it will not double the number of shares, if the dividend goes through. According to the conference call of June 21, 2019 with CEO Joseph Moscato, the share count, which currently stands around 60 million shares will only increase by 9 million shares for a new total of 69 million shares.

It stands to reason the share price once the stock dividend is paid should only decrease by 9/69, but you will have two of them. Or to phrase it another way, after the share dividend, you will end up with two shares worth 60/69th’s each.

So, for example, if you start out with one share worth, for example, $4. Then after the dividend is paid, you would have two shares each worth 60/69. So, $4 x 60/69 equals $3.48 per share. Two shares would be equal to $3.48 + $3.48 = $7.82.

The explanation for this unusual situation is that CEO Joseph Moscato has persuaded large shareholders to waive their rights to the dividend shares.

This stock dividend is not automatic. The requirement is that the stock be uplisted to a national market. According to the company, they will file an application for uplisting to a national market very shortly.

The company will have a conference on July 25, 2019 to update shareholders on the uplisting, and the 1:1 share stock dividend.

For more information go to the company’s website: HOME

Disclosure: I am/we are long GNBT.

Additional disclosure: I have owned shares since 2008.