What I was trying to convey was that the way the reverse split is set up if my understanding of the situation is correct massive downward pressure is likely building against the ten cent stock price when it hits post split because of the potential 4 billion common shares from the convertible preferred stock. Let's look at this another way by putting some values on Red Giant as a Company.
Lets say all stock buyers in the market felt the Company due to the promising characters in their portfolio of ideas and despite their current toxic debt situation is worth $25,000,000. What price would they consider buying some shares at? It would likely be around 25 million dollars divided by 4 billion shares or .00625 per share. So if the reverse split price starts at .10 the price could fall to .00625 because that may be the price stock buyers may be willing to pay to own some shares of the stock.
Currently the stock seems to be valued by REDG post reverse split at approx. 4 billion shares x .10 or $400,000,000 despite it's toxic debt situation and little or no current income as a Company. Will stock buyers be willing to pay that .10 stock price to own some shares ? Is the price likely to rise or fall? Unless stock buyers feel the Company is worth $400,000,000 the stock price should fall until it reaches a share price stock buyers think the Company is worth.
I personally think there should be no more than 200,000,000 potential common shares including convertible preferred post split. The .10 post split price would then have a better chance to hold and rise especially if excellent news comes out about Corporate operations. This would help protect non Board shareholders share value and Board shareholders would still be well protected because they would have around 190 million potential common shares via their convertible preferred shares.
This is my opinion only based on my understanding of the REDG stock situation and everyone should do their own analysis before making any decisions about buying or selling REDG Stock.
