Quote, "I was thinking if they would still be able to convert the discount at the pre RS price and be able to sell on the open market the PPS after the RS."
I don't think that's possible. I know what you're saying- for example, they'd convert today (some conertible debt note holder, say Asher) and get like 10 MILLION shares today, and you're asking if they could then still hold those 10 million and sell them later, post 1000:1 reverse split?
I'd assume, with almost 100% confidence that ANY "brokerage account"- no matter where held (meaning a retail account like E-Trade, or some pro trading firm like a convertible debt holder would/does use- ALL shares get the 1000:1 "division" applied to them and that's regulated by I'd assume places like FINRA and the DTC clearing mechanism and ultimately the SEC).
Thus, post R/S split- a theoretical convertible debt holder who had "converted", say today, and now holds 10 MILLION shares but hasn't sold/dumped them yet, the instant the 1000:1 split is approved and enacted, they'd then have 10 million/1000 = 10,000 dilution shares in their account.
BUT, as I pointed out prior- it makes no difference, cause it's their "percentage" of dilution they hold that really matters in the end. With the new O/S share count becoming 850 THOUSAND (versus say 850 MILLION or so today), or approx 1 MILLION shares O/S, having 10K shares hit the sell-side is no different than having 10 million hit the sell side today IMO.
I'd argue in fact- that the stock will become more "ill-liquid" post reverse split IMO, and that any selling/dumping is going to result in even more down-side pressure for each block that is sold/dumped, as the float has shrunken and the liquidity and volatility thus will be jacked up higher in all probability by my way of looking at it. I think selling/dumping 10K shares onto the Ask/sell-side will be even more dramatic post R/S split, than 10 MILLION shares is today.
That's just a guess- but I see this stock as highly ill-liquid already today- with very little retail shareholder participation IMO. It appears to be mostly in the hands of insiders, those the company issues dilution shares to for payment of bills and interest and any other reason listed in their SEC filings, and mainly in the hands of the convertible debt boys- who are selling/dumping continuously, for all intents and purposes un-ending that I can see. I don't see any of that reality changing just cause a R/S split is enacted.
My .003 or so cents worth
Posts contain only my amateur opinions, personal views and thoughts. I discuss stocks as a hobby only. Always do one's own due diligence before investing.
