BlackRock Prepares ETHA for Reverse Split to Boost Share Price
BlackRock's Ethereum Trust (ETHA) is set to undergo a 1-for-3 reverse share split, which will triple its share price. According to analyst Eric Balchunas, this move could significantly narrow the ETF's trading spread from 7 bps to about 2 bps.
The filing for the reverse split was submitted to the SEC on Tuesday and is set to take effect on October 6. Every three old shares will be converted into one new share, while the total net assets and proportional ownership of all investors will remain unchanged.
Balchunas believes that this move will make ETHA more attractive to institutional investors, as it will increase the price per share without affecting the underlying value of the asset. However, some retail investors may view the reverse split as a negative development, as it could reduce the liquidity and trading efficiency of the ETF.