Direxion has announced it will execute forward share splits for three 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 Semiconductor Bull 3X Shares, Direxion Daily Technology Bull 3X Shares, and the Direxion Daily S&P 500® High Beta Bull 3X Shares (each, a “Fund” and collectively, the “Funds”).
After the close of the markets on March 1, 2021 (the “Payable Date”) the funds affecting forward splits of their issued and outstanding shares as follows:
| Fund Name | Ticker | Forward Split Ratio | Approximate increase in total number of outstanding shares |
| Direxion Daily Semiconductor Bull 3X Shares | SOXL | 15 for 1 | 1400% |
| Direxion Daily Technology Bull 3X Shares | TECL | 10 for 1 | 900% |
| Direxion Daily S&P 500® High Beta Bull 3X Shares | HIBL | 7 for 1 | 600% |
As a result of these share splits, shareholders of each Fund will receive fifteen, ten, or seven 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 February 26, 2021 (the “Record Date”), payable after the close of the NYSE Arca on the Payable Date, March 1, 2021. Shares of the Funds will begin trading on the NYSE Arca on a split-adjusted basis on March 2, 2021 (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-fifteenth, one-tenth, or one-seventh for the Funds. The tables below illustrate the effect of a hypothetical fifteen-for-one, ten-for-one, or seven-for-one split on a shareholder’s investment.
15-for-1 Forward Split
| Period | # of Shares Owned | Hypothetical NAV | Total Market Value |
| Pre-Split | 10 | $150 | $1,500 |
| Post-Split | 150 | $10 | $1,500 |
10-for-1 Forward Split
| Period | # of Shares Owned | Hypothetical NAV | Total Market Value |
| Pre-Split | 10 | $100 | $1,000 |
| Post-Split | 100 | $10 | $1,000 |
7-for-1 Forward Split
| Period | # of Shares Owned | Hypothetical NAV | Total Market Value |
| Pre-Split | 10 | $70 | $700 |
| Post-Split | 70 | $10 | $700 |
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.
Reverse Splits
Direxion will execute a reverse split of the issued and outstanding shares of the Direxion Daily Financial Bear 3X Shares and Direxion Daily Small Cap Bear 3X Shares (each, a “Fund” and collectively, the “Funds”).
After the close of the markets on March 1, 2021 the funds affecting forward splits of their issued and outstanding shares as follows:
| Fund Name | Reverse Split Ratio | Approximate decrease in total number of outstanding shares |
| Direxion Daily Financial Bear 3X Shares | 1 for 8 | 88% |
| Direxion Daily Small Cap Bear 3X Shares | 1 for 8 | 88% |
Please note the CUSIP changes, effective March 2, 2021:
| Fund Name | Ticker | Current CUSIP | New CUSIP |
| Direxion Daily Financial Bear 3X Shares | FAZ | 25460E133 | 25460E240 |
| Direxion Daily Small Cap Bear 3X Shares | TZA | 25460E125 | 25460E232 |
As a result of these reverse splits, every eight 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 eight-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 2, 2021.
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 splits. The table below illustrates the effect of a hypothetical one-for-eight reverse split anticipated for the Funds:
1-for-8 Reverse Split
| Period | # of Shares Owned | Hypothetical NAV | Total Market Value |
| Pre-Split | 80 | $10 | $800 |
| Post-Split | 10 | $80 | $800 |
Redemption of Fractional Shares and Tax Consequences of the Reverse Split
As a result of the reverse splits, 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 March 1, 2021. 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.
“Odd Lot” Unit
Also as a result of the reverse splits, a Fund may have outstanding one aggregation of less than 50,000 shares to make a creation unit, or an “odd lot unit.” Thus, a 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.
The Trust’s transfer agent will notify the Depository Trust Company (“DTC”) of the splits 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.
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, or investing in thematic 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 $19.7 billion in assets under management as of December 31, 2020. For more information, please visit www.direxion.com.
