- The stock price of ShiftPixy Inc (NASDAQ: PIXY) surged by over 140% during intraday trading today. This is why.
The stock price of ShiftPixy Inc (NASDAQ: PIXY) surged by over 140% during intraday trading today. The stock price surged due to the company announcing that its Board of Directors approved a special distribution to ShiftPixy shareholders in the form of shares of common stock of Industrial Human Capital, Inc. (NYSE: AXH), the special purpose acquisition company (SPAC) in which ShiftPixy currently owns an approximate 15% ownership stake.
All ShiftPixy shareholders of record as of May 17, 2022, will receive their pro-rata share of AXH common stock equal in proportion to their percentage holdings of ShiftPixy common stock issued and outstanding, subject to certain conditions described below. And the exact number of shares of AXH common stock to be received by ShiftPixy shareholders for each share of ShiftPixy common stock will be determined immediately before the record date based on the number of shares of ShiftPixy common stock outstanding on an as-converted and as-exercised basis.
The AXH shares are expected to be distributed to eligible ShiftPixy shareholders as soon as practicable following the completion of AXH’s initial business combination, subject to a registration statement covering the AXH shares being declared effective by the SEC. No fractional shares will not be issued and no distributions will be made in lieu of fractional shares. There is no assurance that AXH will be able to successfully complete its initial business combination in which case AXH would cease all operations except for the purpose of winding up and the AXH common stock will be worthless.
ShiftPixy had acquired the AXH shares subject to the special distribution as part of its financial sponsorship of AXH. And pursuant to the terms of that transaction, ShiftPixy is permitted to divest these shares by whatever means it deems appropriate and in its best interests to ensure that it does not become an “investment company” subject to registration under the Investment Company Act of 1940. Plus ShiftPixy’s Board believes that the special distribution will enable the company to avoid registration under the 1940 Act.
ShiftPixy shareholders do not currently need to take any action to receive the special distribution of AXH common stock. And following the completion of AXH’s initial business combination, ShiftPixy shareholders will continue to hold, along with their new shares of AXH common stock, the same number of shares of ShiftPixy common stock they held immediately prior to the special distribution.
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