Amore Pacific Co., South Korea's leading cosmetics firm, said Tuesday that it would split its stock to boost the number of shares in circulation, making its stock more affordable for retail investors.
Earlier in the day, the company's board of directors decided on a 10-1 stock split, with the face value of its common stock and preferred stock to be cut to 500 won per share from the current 5,000 won, meaning that the number of the company's outstanding shares will rise tenfold.
The proposal is subject to approval by shareholders on March 20, the company said in a regulatory filing.
Following the news, Amore Pacific, the most expensive stock per share on the country's stock market, surged by the daily limit of 15 percent but pared most of its earlier gains to trade at
2,851,000 won ($2,595) as of 1:30 p.m., up 0.07 percent from the previous session's close.
Under the proposed measures, the number of shares of its common stock will rise to 58.45 million from the current 5.84 million. The number of shares of its outstanding preferred stock will also increase to 10.55 million from 1.055 million, it added.
Trading of Amore Pacific will be suspended from April 22 to May 8, when its stocks start trading at the new price on the market.
Shares of Amore Pacific have been skyrocketing, with its ordinary stock almost tripling over the past year, virtually shutting out retail investors from trading its stocks.
An increase in the number of outstanding shares usually makes a company attractive to more investors, thus boosting a turnover. The company can also secure better liquidity. (Yonhap)