Atlanta-based homebuilder Beazer Homes USA said Friday it is consolidating its stock in a move that will boost the price of each of its shares.
The company’s 1-for-5 reverse split of common stock means shareholders will get one share for every five they own. The stock price for each share will multiply five-fold so that the overall value of the shares remains the same.
The move, which took effect Friday, reduces the outstanding number of Beazer Homes common stock from 123 million to about 24 million. The number of authorized shares will fall from 180 million shares to 100 million shares.
Beazer, one of the nation’s single-family homebuilders, has said the move would help buffer the stock price’s volatility and encourage investors who tend to steer clear of low-priced stocks.
Like other residential construction companies, the company has struggled as demand for new homes stalled during the recession. The stock, traded on the NYSE, reached $60 a share in early 2008 but has hovered below $20 a share for much of the last year. It closed at $16.90 on Friday.
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