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Direxion Announces Forward and Reverse Splits of Four ETFs

March 13, 2020
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NEW YORK — March 13, 2020 — Direxion has announced it will execute forward share splits for two of its exchange-traded funds (“ETFs”), as well as reverse share splits for an additional two ETFs. The total market value of the shares outstanding will not be affected as a result of these splits, except with respect to the redemption of fractional shares, as outlined below.

Forward Splits

Direxion will execute a forward split of the issued and outstanding shares of the Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3X Shares and the Direxion Daily Natural Gas Related Bear 3X Shares (each, a “Fund” and collectively, the “Funds”).

After the close of the markets on March 26, 2020, the funds affecting forward splits of their issued and outstanding shares as follows:

Fund NameTickerForward Split RatioApproximate increase in total number of outstanding shares
Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3X SharesDRIP12 for 11100%
Direxion Daily Natural Gas Related Bear 3X SharesGASX10 for 1900%

As a result of these share splits, shareholders of each Fund will receive twelve or ten shares for each share held of the applicable Fund as indicated in the table above. Accordingly, the number of each Fund’s issued and outstanding shares will increase by the approximate percentage indicated above.

All share splits will apply to shareholders of record as of the close of NYSE Arca, Inc. (the “NYSE Arca”) on March 25, 2020 (the “Record Date”), payable after the close of the NYSE Arca on the Payable Date. Shares of the Funds will begin trading on the NYSE Arca on a split-adjusted basis on March 27, 2020 (the “Ex-Date”). On the Ex-Date, the opening market value of each Fund’s issued and outstanding shares, and thus a shareholder’s investment value, will not be affected by the share split. However, the per share net asset value (“NAV”) and opening market price on the Ex-Date will be approximately one-twelfth or one-tenth for the Funds. The tables below illustrate the effect of a hypothetical twelve-for-one or ten-for-one split on a shareholder’s investment.

12-for-1 Forward Split

Period# of Shares OwnedHypothetical NAVTotal Market Value
Pre-Split10$120$1,200
Post-Split120$10$1,200

10-for-1 Forward Split

Period# of Shares OwnedHypothetical NAVTotal Market Value
Pre-Split10$100$1,000
Post-Split100$10$1,000

Reverse Splits

Direxion will execute a reverse split of the issued and outstanding shares of the Direxion Daily MSCI Mexico Bull 3X Shares and the Direxion Daily Latin America Bull 3X Shares (each, a “Fund” and collectively, the “Funds”).

After the close of the markets on March 26, 2020, the funds affecting reverse splits of their issued and outstanding shares as follows:

Fund NameReverse Split RatioApproximate decrease in total number of outstanding shares
Direxion Daily MSCI Mexico Bull 3X Shares1 for 1292%
Direxion Daily Latin America Bull 3X Shares1 for 2095%

Please note the CUSIP changes, effective March 27, 2020:

Fund NameTickerCurrent CUSIPNew CUSIP
Direxion Daily MSCI Mexico Bull 3X SharesMEXX25460E75225460E281
Direxion Daily Latin America Bull 3X SharesLBJ25490K29925460E273

As a result of these reverse splits, every twelve or twenty shares of a Fund will be exchanged for one share as indicated in the table above. Accordingly, the total number of the issued and outstanding shares for a Fund will decrease by the approximate percentage indicated above. In addition, the per share net asset value (“NAV”) and next day’s opening market price will be approximately twelve- or twenty-times higher for the Funds. Shares of the Funds will begin trading on the NYSE Arca, Inc. (the “NYSE Arca”) on a split-adjusted basis on March 27, 2020.

The next day’s opening market value of the Funds’ issued and outstanding shares, and thus a shareholder’s investment value, will not be affected by the reverse split. The tables below illustrate the effect of a hypothetical one-for-twelve or one-for-twenty reverse split anticipated for the Funds, as applicable and described above:

1-for-12 Reverse Split


Period
# of Shares OwnedHypothetical NAVTotal Market Value
Pre-Split60$120$7,200
Post-Split5$1,440$7,200

1-for-20 Reverse Split


Period
# of Shares OwnedHypothetical NAVTotal Market Value
Pre-Split60$100$6,000
Post-Split3$2,000$6,000

The Trust’s transfer agent will notify the Depository Trust Company (“DTC”) of the reverse split and instruct DTC to adjust each shareholder’s investment(s) accordingly. DTC is the registered owner of the Funds’ shares and maintains a record of the Funds’ record owners.

Redemption of Fractional Shares and Tax Consequences for the Reverse Split

As a result of the reverse split, a shareholder of a Fund’s shares potentially could hold a fractional share. However, fractional shares cannot trade on the NYSE Arca. Thus, a Fund will redeem for cash a shareholder’s fractional shares at the Fund’s split-adjusted NAV as of the Record Date. Such redemption may have tax implications for those shareholders and a shareholder could recognize a gain or loss in connection with the redemption of the shareholder’s fractional shares. Otherwise, the reverse splits will not result in a taxable transaction for holders of Fund shares. No transaction fee will be imposed on shareholders for such redemption.

The forward share splits will not result in a taxable transaction for holders of the Funds’ shares. No transaction fees will be imposed on shareholders in connection with the share splits.

“Odd Lot” Unit

Also as a result of the reverse split, the Fund may have outstanding one aggregation of less than 50,000 shares to make a creation unit, or an “odd lot unit.” Thus, the Fund will provide one authorized participant with a one-time opportunity to redeem the odd lot unit at the split-adjusted NAV or the NAV on such date the authorized participant seeks to redeem the odd lot unit.

About Direxion:

Direxion equips investors who are driven by conviction with ETF solutions built for purpose and fine-tuned for precision. These solutions are available for a broad spectrum of investors, whether executing short-term tactical trades, investing in macro themes, or building long-term asset allocation strategies. Direxion’s reputation is founded on developing products that precisely express market perspectives and allow investors to manage their risk exposure. Founded in 1997, the company has approximately $15 billion in assets under management as of  December 31, 2019. For more information, please visit www.direxion.com.

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There is no guarantee that the Funds will achieve their investment objectives.

For more information on all Direxion Shares daily leveraged ETFs, go to direxion.com, or call us at 866.301.9214.

Leveraged ETFs are not suitable for all investors and should be utilized only by investors who understand the risks associated with seeking daily leveraged and inverse investment results, and intend to actively monitor and manage their investments. Due to the daily nature of the leveraged and inverse investment strategies employed, there is no guarantee of long-term inverse returns. Past performance is not indicative of future results.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-716-0735 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks - An investment in the ETFs involves risk, including the possible loss of principal. The ETFs are non-diversified and include risks associated with concentration that results from an ETF’s investments in a particular industry or sector which can increase volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. The ETFs do not attempt to, and should not be expected to, provide returns which are a multiple of the return of their respective index for periods other than a single day. For other risks including leverage, correlation, daily compounding, market volatility and risks specific to an industry or sector, please read the prospectus.

Distributor: Foreside Fund Services, LLC.

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