Actifio reverse stock split signals IPO plans

Actifio, the venture-backed data management vendor, has instituted a reverse stock split, according to sources. This indicates an IPO could be imminent and will ensure that the stock trades in double digit figures.

So what does it mean for Actifio’s existing stockholders? A reverse stock split means they hold the same value, just in fewer shares. Simple, right? But according to our sources, Actifio’s manoeuvre has prompted some employee disquiet.

According to a document we have seen, the company is implementing a reverse stock split ratio of 100,000 to 1. At first sight this looks like Actifio has been handing out options as if they were confetti. In another section of the document, Actifio says the change “decreases the aggregate number of shares of Common Stock issuable thereunder to 9,728,360 shares of Common Stock.”

If we multiply that figure by 100,000 we arrive at 972 billion… shurely shome mishtake? Typo somewhere? If correct, this would make Actifio the Venezuela of reverse stock splits.

Pre-IPO reverse stock splits are an increasing trend, according to a recent Wall Street Journal article: “Investment bankers say institutional investors generally want to see an IPO price in the $10-to-$20-per-share range, which can be hard to achieve if too many shares dilute the price.”

We’ve asked Actifio for a comment and a company spokesperson said: “As a privately held company, we do not comment on this confidential matter.”

Actifio was established in 2009 and is funded to the tune of $311.5m. The company makes golden copies of primary data and feeds them downstream users such as Test & Dev, compliance officers, data analysts and others.

N.B. We have corrected the shares calculation – an earlier version of the article stated the figure was 9.72 trillion.