Grayscale Investments announced on Wednesday that shares of its Grayscale Ethereum Trust (ETHE) will split 9-for-1, a move that will increase liquidity and perceived affordability of the shares.
- Effective Dec. 17, any shareholders as of Dec. 14 will receive eight additional ETHE shares for each one held, with each being a ninth the value and price of the present unsplit shares.
- ETHE, a vehicle for investors to gain exposure to ether (ETH), the native currency of the Ethereum blockchain, currently has 29.5 million shares outstanding with each share representing ownership of 0.09284789 ETH.
- When the stock split takes effect, there will be 265.5 million ETHE shares with each representing 0.01031643 of an ether token, a ninth of its current value.
- In a stock split, though, there are more shares outstanding, each new share is proportionally less valuable.
- Companies typically split their shares to increase the number of shares in circulation, thus boosting liquidity.
- In addition, by making each share a fraction of the value price of the original share, it makes the split shares more affordable to retail investors, who may have been put off by the price of the unsplit shares.
- Shares of ETHE are at $109.10, up $0.11. Year to date, the shares have risen about 350%, largely in line with the price of ETH, also up about 350%.
- Grayscale Investments is owned by Digital Currency Group, the parent of CoinDesk.