PR Newswire
WALNUT CREEK, Calif., April 22, 2020
WALNUT CREEK, Calif., April 22, 2020 /PRNewswire/ -- USCF announced today that it will execute a one-for-eight reverse share split that will be effective for shareholders of the United States Oil Fund, LP (NYSE Arca: USO) after the close of the markets on April 28, 2020. Shares of USO will trade at their post-split prices on April 29, 2020. USO's ticker symbol, "USO", will not change, and shares of USO will continue to trade on the NYSE Arca. USO's new CUSIP number will be 91232N207.
The reverse share split will reduce the number of USO's shares outstanding and will result in a proportionate increase in the net asset value per share ("NAV") of USO. As a result of the reverse share split, USO shareholders on April 28, 2020 will receive one post-split share of USO for every eight pre-split shares of USO they hold. Immediately after the reverse share split is effective, USO's post-split shares will have an NAV that is eight times higher than that of pre-split shares.
The reverse share split will affect all of USO's shareholders. The reverse share split will not affect any shareholder's percentage interest in USO, except to the extent that the reverse share split results in a shareholder receiving cash in the transaction. The NYSE Arca does not permit the trading of fractional shares. As described below, shareholders otherwise entitled to receive fractional shares as a result of the reverse share split will thus receive cash in lieu of such fractional shares.
Illustration of a Reverse Share Split
The following table shows the effect of a hypothetical 1 for 8 reverse share split:
Table 1. Hypothetical Example of a 1-for-8 Reverse Share Split: | |||
Period | # of Shares | Net Asset Value (NAV) | Total Value |
Pre-Split | 120 | $5 | $600 |
Post-Split | 15 | $40 | $600 |
Redemption of Fractional Shares and Tax Consequences for the Reverse Share Split
USO shareholders that hold USO shares that are not an exact multiple of USO's reverse share split ratio (a multiple of 8) would hold fractional shares as a result of the reverse share split. As noted above, the NYSE Arca does not permit the trading of fractional shares. Shareholders otherwise entitled to fractional shares as a result of the reverse share split will receive cash in lieu of such fractional shares. The receipt of cash in lieu of fractional shares will generally reduce a USO shareholder's basis in USO shares by the amount of cash received. If the amount of cash received in lieu of fractional shares exceeds a USO shareholder's aggregate basis in the shareholder's shares, such shareholder would recognize gain equal to the amount of such excess. This may cause a taxable event for those shareholders. Other than in the case of USO shareholders receiving cash in excess of basis, the reverse share split is not anticipated to result in the recognition of taxable gain to USO shareholders.
"Odd-Lot" Share
Also, as a result of the reverse share split, USO may have outstanding, with respect to certain of its authorized participants, aggregations of less than 100,000 shares required to make a redemption basket, or a so-called "odd-lot share". Each of USO's authorized participants will be provided with a one-time opportunity to redeem any odd-lot share resulting from the reverse share split.
Frequently Asked Questions About the Reverse Share Split
An investment in shares issued by USO involves risks. These risks can significantly impact the market value of USO's shares. Some of the risks you may face are summarized below:
For a further discussion about USO and the risks associated with an investment in USO, see USO's Prospectus, which is available at http://www.uscfinvestments.com/documents/united-states-oil-fund-pro-20200323.pdf
About USCF:
USCF operates on the leading edge of product innovation as an asset management firm offering exchange- traded products (ETPs) and exchange-traded funds (ETFs). The firm broke new ground with the launch of the first oil ETP, the United States Oil Fund, LP (USO), in 2006. Over the next decade, USCF designed and issued ten more specialty products across commodity and private equity asset classes. For more information about USCF visit our website www.uscfinvestments.com.
Exchange Traded Product Disclosure:
We advise you to consider a Fund's objectives, risks, charges and expenses carefully before investing. Download a copy of a Fund's Prospectus by clicking on the following: USO which contains this and other information, or contact the Fund's distributor at: ALPS Distributors, Inc., 1290 Broadway, Suite 1100, Denver, Colorado 80203 or call 800-920-0259. Please read the Fund's Prospectus carefully before investing.
USO is a commodity pool regulated by the Commodity Futures Trading Commission. These Funds are not mutual funds or any other type of Investment Company within the meaning of the Investment Company Act of 1940, as amended, and are not subject to regulation thereunder.
Past performance does not guarantee future results.
Commodity trading is highly speculative and involves a high degree of risk. Commodities and futures generally are volatile and are not suitable for all investors. An investor may lose all or substantially all of an investment. Investing in commodity interests subject each Fund to the risks of its related industry. These risks could result in large fluctuations in the price of a particular Fund's respective shares. Funds that focus on a single sector generally experience greater volatility. For further discussion of these and additional risks associated with an investment in the Funds please read the respective Fund Prospectus before investing.
Funds distributed by ALPS Distributors, Inc.
USO002178 Exp. 04/30/2022
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SOURCE USCF
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