Themes ETF Trust approved December reverse splits for 16 Leverage Shares ETFs
The steepest splits fall on the cheapest funds, effective Dec. 3 and Dec. 8. The trust has also filed for 2X long and 2X short ETFs on Harvey AI ahead of a possible IPO.
Key takeaways
Themes ETF Trust's board has approved reverse share splits for 16 Leverage Shares 2X long single-stock ETFs, at ratios the trust's supplements call proposed. The trust said so on Thursday, Nov. 12, in supplements to the funds' prospectuses, filed with the Securities and Exchange Commission.
The funds are series of the trust and trade under the Leverage Shares name. Themes Management Company is the adviser. In a filing the same day, the trust identifies the adviser's chief executive, Jose C. Gonzalez, as co-founder and chief executive of Leverage Shares, which the filing describes as a provider of exchange-traded products in Europe.
Splits for six funds take effect after the U.S. market close on Dec. 3, and those shares start trading on a split-adjusted basis on Dec. 4. The other 10 take effect after the close on Dec. 8, with split-adjusted trading on Dec. 9.
The supplements say a reverse split will not change the value of a shareholder's investment, or the fund's total net assets. The number of shares outstanding falls, and the net asset value per share rises in proportion. A holder receives one new share for every 10, 15, 20, 40 or 50 shares held, depending on the fund.
The supplements do not say why the trust is splitting the shares.
The steepest ratio is on the cheapest shares. Themes ETF Trust's Leverage Shares 2X Long AAOI Daily ETF, AAOG, which seeks twice the daily move in Applied Optoelectronics, closed Thursday at $0.43, against a 52-week high of $22.98, and its Leverage Shares 2X Long CIFR Daily ETF, CIFG, on Cipher Mining, closed at $0.54, against a high of $20.71. Both carry a proposed 1-for-50.
The steepest reverse splits sit on the cheapest shares
Six of the 16 closed below $1. None closed above $3.
Three of the funds under $1 split after the close on Dec. 3. The other three, including the cheapest, split after the close on Dec. 8.
Harvey AI funds the trust cannot sell yet
On Thursday, the trust also filed a registration statement for two new series: the Leverage Shares 2X Long Harvey AI Daily ETF and the Leverage Shares 2X Short Harvey AI Daily ETF. It is marked subject to completion and dated Nov. 12. The trust may not sell the shares until that registration is effective.
Harvey, the prospectus says, builds artificial intelligence software for legal and professional work, including research, drafting, contract review and due diligence. The long fund would seek, before fees and expenses, 200% of the daily percentage change in Harvey's common stock. The short fund would seek minus 200% of that daily change.
Harvey is not affiliated with the trust and is not involved in the ETF offering.
If Harvey's stock falls 50% or more in one day, the filing says, investors in the long fund would lose all of their money. If the stock rises 50% or more in one day, investors in the short fund would lose all of their money.
The funds expect to start on or about the day Harvey's stock begins trading in an initial public offering. The prospectus says that the offering may be delayed or may not be completed, and that the stock has not begun public trading.
Public filings for Harvey AI Corp, the San Francisco company formerly named Counsel AI Corp, are notices of private offerings, the latest dated Sept. 11. Business Insider reported on Nov. 5 that one person familiar with the matter said Harvey's talks with lawyers at Latham & Watkins about going public were preliminary, with no listing imminent.
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