Double Crown Resources Inc. (fka DDCC)

[ProfitScout]

In theory but not practicality. Investors do not like to see their stocks go through a reverse so they typically sell out as soon as one is announced which drives the pps much lower before the reverse can even take place. It's a catch-22 situation. That is why most companies who care about their shareholder value avoid doing the RS.

I think it is clear that DDCC management understands this which is why they have not put any RS into their planning. The only time a RS can work out in the long-run is after the company has at least several quarters of positive earnings behind it and a solid PE ratio so that even if the stock does sell off on the announcement of a RS there should be a recovery back to at least the fundamental value.

Regardless, I really don't think it is an issue to worry about with DDCC as they have stated several times they are not planning any RS and also we now see management buying shares themselves in the open market which they would not be doing if they were about to announce any RS here.