Gaming Industry Insider by Ray Poirier | Impacted by the company’s failure to make a profit, Magna Entertainment Corp. (MECA) has seen its share price fall to a level below 50 cents, a price that has discouraged outside investment.
Frank Stronach, founder, CEO and principal shareholder, looks to resolve the share price problem by instituting a reverse split utilizing a one-for-twenty ratio of Class A or Class B stock.
The company’s board of directors approved the plan with a vote on July 3. The expected effective date for the 1-20 reverse split is July 22.
The Canadian-based company operates more than a dozen horse tracks, as well as an advance deposit wagering system. After six years of losses, during which the company has had an equal number of different chief executive officers, the company has raised cash by selling off much of its real estate to an affiliated firm.
One of its operations is Santa Anita racetrack in Arcadia, California, which will be the site of this year’s Breeders’ Cup championship day of racing.