The market liked what it saw out of Chinese stock Tian Ruixiang Holdings (NASDAQ:TIRX), an insurance brokerage company. It liked it so much, in fact, that shares of Tian Ruixiang were up around 68% in Thursday afternoon’s trading, a massive surge by any reckoning. The biggest reason seems to stem from a new plan for share consolidation that will likely add value to the current shares.
Reports note that, on May 6, Tian Ruixiang will stage what it calls an “Extraordinary General Meeting” to vote on a share consolidation plan. Working effectively like a reverse stock split, the move will see every five current Class A and Class B shares consolidated into one share, and its par value will increase accordingly. Oddly, there will be no fractional shares offered.
A Tumultuous Era
A five-for-one consolidation might seem drastic, but given the circumstances it might have been the only real option. After all, just three weeks ago, Tian Ruixiang got a notice from Nasdaq over non-compliance with rules. Specifically, rule 5250 (c) (1), the rule regarding the obligation to file periodic financial reports.
Further, given that just a week ago, CEO and Chairman Zhe Wang stepped down from the company’s board of directors citing “personal reasons,” that only makes things more unstable for the company. Factor in all these points together, and the consolidation might help Tian Ruixiang, particularly given the macroeconomic issues currently going on in China.
Is TIRX Stock a Good Buy?
A look at the last five days of trading for TIRX stock reveals a sudden, substantial surge in today’s trading. That’s unusual because prior to that, TIRX stock was comparatively flat. But after the huge run-up today, followed by a loss likely connected to profit-taking, TIRX shares settled back into a comparatively flat state. Still, today’s gains were enough to send TIRX shares up 64.26% in the last five days.
