Yunji Inc. to Update Its ADS Ratio
Yunji Inc. (NASDAQ: YJ), a membership-based social e-commerce platform, plans to change the ratio of its American Depositary Shares (ADSs) to Class A ordinary shares. The goal is simple: make trading cleaner and improve the overall experience for shareholders.
What’s Changing in the ADS Ratio
The company will move from the current ratio—one ADS representing one hundred Class A ordinary shares—to a new ratio of one ADS representing four hundred Class A ordinary shares. In practical terms, it’s the equivalent of a one-for-four reverse ADS split. The change is expected to take effect on or about September 13, 2024, pending regulatory approval. To meet regulatory requirements, Yunji will file a post-effective amendment to its ADS Registration Statement so the change aligns with SEC guidelines.
What This Means for Current ADS Holders
When the change becomes effective, holders will exchange four existing ADSs for one new ADS. Deutsche Bank Trust Company Americas, the depositary, will manage the exchange and oversee the process so the transition is handled in an orderly way. The adjustment affects the ADSs only and is structured to consolidate existing positions into a smaller number of higher-ratio ADSs.
How Fractional ADSs Will Be Handled
No fractional new ADSs will be issued. If an account would end up with a fraction, those fractional entitlements will be aggregated by the depositary bank and sold, and the net cash proceeds will be distributed to the respective ADS holders. Importantly, the change does not affect the underlying Class A ordinary shares.
Expected Impact on Trading
Because each ADS will represent more underlying shares after the change, Yunji expects the trading price of its ADSs to adjust proportionally. There are no guarantees regarding the exact price after the change, but the company believes the adjustment could be constructive for shareholders over time.
About Yunji Inc.
Yunji operates a social e-commerce platform built around a membership model. It offers products across many categories and encourages members to share with their networks. By using big data analytics and artificial intelligence to refine the experience, the platform aims to make discovery easier and engagement more natural. Combined with disciplined supply chain management and selective product offerings, this approach has helped Yunji position itself as a trustworthy marketplace with exclusive member benefits.
Frequently Asked Questions
What is the new ADS ratio for Yunji?
Each ADS will represent four hundred Class A ordinary shares. Previously, each ADS represented one hundred shares. In effect, this functions like a one-for-four reverse ADS split.
When will this change take effect?
The change is expected to become effective on or about September 13, 2024, pending regulatory approval. Yunji plans to file a post-effective amendment to its ADS Registration Statement to support the change under SEC guidelines.
How will this change affect current ADS holders?
Holders will exchange four existing ADSs for one new ADS once the change is effective. Deutsche Bank Trust Company Americas will facilitate the swap and coordinate the process to help ensure a smooth transition.
What happens to fractional ADSs?
Fractional entitlements will not be issued. Instead, the depositary bank will aggregate and sell those fractions and distribute the net cash proceeds to the ADS holders entitled to them. The underlying Class A ordinary shares are not affected.
What is the anticipated effect on trading price?
Yunji expects the ADS trading price to adjust proportionally with the new ratio; however, there’s no guarantee of any specific price level after the change. The company believes the adjustment could benefit shareholders over time.
