Shares in Paladin Energy Ltd (ASX: PDN) have spent most of the day in the red today after the company announced it will sell off the shares of shareholders who own small holdings.
In afternoon trade, the Paladin share price peaked briefly at 46.5 cents, before dipping down again. At the close of trading, the Paladin share price was swapping hands at 46.2 cents – just 0.43% higher than yesterday's close.
According to the uranium company's release, shareholders with less than $500 worth of Paladin shares will be automatically included in the organised sale.
Let's take a closer look at Paladin's plan.
Image source: Getty Images
Selling small shareholdings
The company is attempting to reduce its administration costs caused by a large number of shareholders holding a small amount of shares.
The uranium company will cover the brokerage and handling costs incurred from the sale.
Shareholders who hold less than $500 worth of Paladin shares and wish to keep them must opt out of the sale or buy more shares by 9 August.
The company has determined that a holding of less than 1,086 shares is a "less than marketable parcel". That's based on Paladin's closing share price on 18 June, which was 46 cents.
According to Paladin, the company has 26,515 shareholders. Of those shareholders, 17,343 hold a "less than marketable parcel". Combined, those 17,343 shareholders hold around 0.8% of the company's outstanding shares.
The company will sell the small share parcels according to the share price at market close on 9 August.
If a shareholder's parcel is worth more than $500 on 9 August due to the company's share price increasing between now and then, their shares won't be sold.
The shareholders who participate will receive the proceeds of the sell-off.
Paladin share price snapshot
The Paladin share price is having a good run on the ASX lately.
Currently Paladin shares are up 86% year to date, and 374% since this time last year.
The energy company has a market capitalisation of around $1.2 billion, with approximately 2.6 billion shares outstanding.
