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With the Under Armour stock split date just days away, we've compiled a list of the 10 facts every investor needs to know about the split.
Under Armour stock has been an outperformer since its initial public offering on Nov. 18, 2005. The Baltimore-based company priced its IPO at $13 a share. That was up sustainably from earlier estimates that ranged from $7.50 to $12. At a recent price of $86.16, the Under Armour stock price is up 224% and 406% over the last three and five years, respectively.
Under Armour Inc. (NYSE: UA) was founded by the company's current chairman and CEO, Kevin Plank. A Maryland native, Plank started Under Armour in 1996 in his grandmother's basement with a prototype for a sweat-wicking compression shirt. His aim was to create athletic wear that's better than traditional cotton T-shirts.
In addition to state-of-the-art workout wear, Under Armour sells sneakers, golf shoes, bags, and much more. The company has also invested heavily in technology and sells a variety of wearable devices that help athletes improve their performance.
Over the decade, Plank has built Under Amour into a $20 billion company and formidable rival to Nike Inc. (NYSE: NKE).
Here's what investors need to know with the Under Armour stock split date approaching...
10 Must-Know Facts as the Under Armour Stock Split Date Approaches
- The Under Armour stock split date is April 7. Shareholders of record on March 28 will receive shares of a new Class C stock.
- The Class C stock will be issued through a stock dividend on a 1-for-1 basis to all existing holders of Under Armour stock. The distribution of the new Class C stock will have the same effect as a 2-for-1 stock split.
- The new shares will trade under the ticker "UA.C." Shares of Under Armour's Class A stock will continue to trade under the ticker "UA."
- The new Class C shares will not give holders the power to vote on board elections, company resolutions, or other matters.
- Plank owns all the Class B shares. Those shares have 10 times as much voting power as the Class A shares. The new class of stock, which comes with no voting rights, ensures that Plank retains control over the company.
- In August 2015, Plank signed an agreement not to compete with Under Armour for five years if he leaves the company. That's important to many investors who believe he is the driving force behind Under Armour.
- The April 7 split marks the third time in three years that Under Armour has split its stock.
- More Under Armour stock splits are likely. The company doesn't plan to conduct another Class C split. But Under Armour said during its August 2015 shareholder meeting that there will be "lots more regular splits" in the future.
- When a company splits its shares, the market cap before and after the split remains the same. In short, shareholders own more shares, but each is valued at a lower price per share. However, a lower-priced stock on a per-share basis often attracts a wider range of buyers, which can boost shares.
- The consensus Wall Street analyst rating on Under Armour stock is "Buy." The company is projected to post earnings per share of $0.05 when it reports Q1 2016 results on April 17 before the open. That would match EPS posted in the same quarter a year ago.
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- Associated Press: Under Armour Approves 2-for-1 Stock Split; New Shares Won't Have Voting Rights
- Under Armour: Under Armour Announces Class C Stock Dividend