Summary
Energy Transfer Equity, L.P. (ET) announced a two-for-one common unit split effective July 24, 2015, with a record date of July 15, 2015. This means existing unitholders will receive one additional common unit for each unit they hold. The primary driver for this action is likely to enhance the liquidity and trading attractiveness of its common units by making the per-unit price more accessible to a broader range of investors.
Key Highlights
- 1Energy Transfer Equity (ET) announced a 2-for-1 common unit split.
- 2The unit split will be executed as a distribution of one additional common unit for every common unit held.
- 3The record date for the unit split is July 15, 2015.
- 4The expected completion date for the unit split is July 24, 2015.
- 5The purpose of the split is to increase unit liquidity and potentially broaden investor appeal.
- 6The filing includes a press release dated May 28, 2015, as an exhibit.
Frequently Asked Questions
A two-for-one unit split means that for every common unit an investor currently owns, they will receive an additional common unit. Effectively, the number of outstanding units doubles, and the price per unit is expected to be halved, while the total market value of an investor's holdings remains the same immediately after the split.
While not explicitly stated as the sole reason, unit splits are typically implemented to make the per-unit trading price more attractive and accessible to a wider range of investors, potentially increasing trading liquidity and demand for the units.
Immediately after the split, the total market value of your investment should remain the same. You will own twice as many units, but each unit's price will be approximately half of what it was before the split. Over time, the split could potentially lead to increased trading activity or price appreciation, but this is not guaranteed.
If your units are held in a brokerage account, no action is required on your part. Your broker will automatically handle the crediting of the additional units. If you hold physical unit certificates, you will need to follow the instructions provided by Energy Transfer Equity to exchange your old certificates for new ones representing the split units.