ERHC Energy Inc (ERHE)

[nordicroots]

The RS in and of itself has no real significance as MTO has observed before. The percentage each has as ownership stays the same - you are just cutting up the pizza into different sized slices. There are many instances of a company doing a reverse split for the sake of maintaining a share price above a certain threshold to meet stock exchange listing requirements (e.g., NYSE) but the exchange this thing is traded on obviously doesn't have this same sort of requirement as one of the larger exchanges so it should not be an issue.

The danger with a RS as we talk about here appears when someone decides to throw an increase in the authorized outstanding shares into the mix - these are two distinctly separate actions and even though the company asserts that one goes hand in hand with the other this is not a given in every circumstance. When these two are combined together we have the potential for even more dilution than we have already seen and this is why some on this board so strongly oppose the idea of one. Many feel there has already been way too much dilution on legacy shareholders.