Stock split opinion.
I believe the stock split was simply a tool the company needed to use to create a funding opportunity. It is the most powerful tool any company has at their disposal. It is not done with investors in mind, investors come later.
The company needed access to large amounts of money to move forward with all their goals--short term interest has no bearing what so ever.
Investors could only have achieved short term gains without the funding needed to advance the companies product development. That IMO is why company policy seems to go against the wishes of the current investing public. Long term viability will and should always trump short term investing strategies.
That being said there are ways the two strategies can feed off each other and be very profitable together.
How does the company work things going forward? Do they use the other tools they have to raise the price to a point where far fewer shares need to be sold to raise a desired amount of cash or do they sell a lot of shares at a lower price to "reward" their new funding source?
While I see it as a necessary evil, I'm guessing it will be the latter. Why? Because that source can be tapped over and over again as long as it is treated well when used. Make no mistake, the new funding source will have no care how they affect the average shareholder. They make their money on the discount to market price they normally get for the large cash infusion. Everyone involved in the process makes their money immediately sometimes with attached warrants that also let them achieve a second windfall whenever they want. It may seem unfair to the general investing public, but it is the way things are done now. It would be nice if those getting involved had a conscience regarding other shareholders, but that isn't the case. They usually always have another deal that needs their cash. By selling the shares they get, they have turned their money without risk and are ready to do it again. It's a great gig if you can get it.
The company could easily offer information that would raise the price upwards of $20 if they wanted to IMO. That would unfortunately take some of the fluff the new investors will be rewarded with. The more you reward them now, the easier it will be to hit them up again in the future. By then they will only be investing the money you made for them anyway.
Looking at a company like Rodman and Renshaw will give you an understanding of what I am referring to. Even the timing of press releases is part of the art of raising money.
