Notice of Adjourned Meeting - -3x Oil & Gas

Leverage Shares PLC has convened an adjourned meeting for holders of its Leverage Shares -3x Short Oil & Gas ETP Securities (ISIN: XS2399370803) on April 10, 2026, to consider a proposed consolidation. This decision follows a significant decline in the ETP Security Value, which fell below 2% of the Principal Amount on February 19, 2026. The proposed consolidation aims to increase the ETP Security Value to approximately US$30 per ETP Security, thereby enhancing liquidity for secondary market investors. While the issuer intends for the economic interest of securityholders to remain unchanged, the total Principal Amount and Principal Protection Amount will be reduced, which raises questions regarding the long-term implications for investors.

The context of this announcement is critical. The ETP market has been under pressure, particularly in sectors like oil and gas, which have faced volatility due to fluctuating commodity prices and geopolitical tensions. The decision to convene an adjourned meeting indicates that the initial meeting lacked the necessary quorum, suggesting a potential lack of engagement or concern among securityholders regarding the proposed changes. The consolidation is intended to counteract the negative sentiment surrounding the ETP's performance, but it also reflects a broader trend where financial instruments must adapt to changing market conditions to maintain investor interest.

From a financial perspective, the consolidation proposal is a strategic move aimed at stabilizing the ETP's market value. However, it raises important questions about funding sufficiency and potential dilution risks. The consolidation will result in securityholders holding fewer ETPs, albeit at a higher individual value. This could lead to a perception of reduced ownership, which may deter some investors. The issuer has not indicated any immediate need for additional capital; however, the reduction in the Principal Amount could impact the ETP's ability to withstand further market fluctuations, particularly if the underlying oil and gas sector continues to experience volatility.

In terms of valuation, the proposed consolidation is designed to enhance the liquidity of the ETPs, which could potentially attract new investors. However, the effectiveness of this strategy will depend on the market's reception. The current ETP Security Value, which has fallen significantly, raises concerns about the underlying asset's performance. Without specific market capitalisation figures disclosed in the announcement, it is challenging to conduct a direct peer comparison. However, it is essential to note that the consolidation aims to bring the ETP Security Value closer to the Target ETP Security Value of US$30, which would represent a significant improvement from its current state.

Execution risk is a notable concern in this scenario. The issuer's historical performance in meeting timelines and delivering on strategic initiatives will be scrutinised as the adjourned meeting approaches. If the consolidation is approved, the issuer will need to effectively communicate the changes to securityholders and ensure that the transition is smooth. Additionally, there is a risk that the consolidation may not achieve the desired effect of improving liquidity, particularly if market conditions remain unfavourable. The lack of quorum at the original meeting could also indicate broader investor apathy or skepticism regarding the issuer's ability to navigate these challenges.

The next measurable catalyst will be the adjourned meeting on April 10, 2026, where securityholders will vote on the proposed consolidation. The outcome of this meeting will be pivotal in determining the future trajectory of the ETP. Should the consolidation be approved, it could lead to a temporary uplift in market sentiment; however, if rejected, it may further exacerbate the ETP's challenges in regaining investor confidence.

In conclusion, the announcement regarding the adjourned meeting and proposed consolidation is classified as moderate in terms of materiality. While it reflects an attempt to address the declining ETP Security Value and improve liquidity, it also highlights the underlying challenges facing the issuer and the oil and gas sector. The consolidation could have implications for valuation and investor sentiment, but its success will ultimately depend on market conditions and the issuer's execution capabilities. Investors should remain cautious as they assess the potential risks and rewards associated with this development.

Key insights

• ●Proposed consolidation aims to increase ETP Security Value to US$30.
• ●Original meeting lacked quorum, indicating potential investor apathy.
• ●Next catalyst is the adjourned meeting on April 10, 2026.

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