Sanmina-SCI, the San Jose electronics contract manufacturer, said its stockholders approved a proposal by which its board may reverse-split shares of its stock anywhere from 1 share for every 3 to 1 for every 10 shares. The board has up to a year in which to take the step, which was approved Sept. 29.
As of June 28, 2008, Sanmina-SCI (ticker: SANM) had some 531 million shares of common stock outstanding. The board had urged shareholders to OK the reverse-split saying that the resulting higher price per share would attract “a broader range of institutions” to buy its shares who might be prohibited from buying shares of a company whose share price is below a certain threshold. Over the last year, Sanmina’s shares have closed as low as $1.07 and as high as $2.62, averaging $1.73. They closed Wednesday at $1.33, down 7 cents for the day, or 5 percent.
The step could also help the company combat a possible delisting of its shares from the Nasdaq market if they were to fall below $1 and remain there too long.