Saturday, May 07, 2016 7:48:14 PM
A reverse 10:1 split at $.50 means that for every 10 shares you get 1 share. It also means that the initial share price will be 10 times greater or $5.00 a share. That means for the time of the split you will have the same money but only 10% of the shares and each share would be worth 10 times more.
So if you had today 10,000 shares and the share price was $.50 that would be $5000.00.
Once the split happened then you would have 1000 shares and the share price would be $5.00 and that would still be $5000.00.
If it is true that the directors' numbers of shares will remain the same their share value will be 10 times greater. They will all be instant millionaires without any effort. Bad Idea for shareholders who are not eligible. Really bad idea. It will disconnect their performance to their gain. Why work hard once the shares are sold you can sell out, drop out and retire anywhere and do anything.
Honestly who would continue to work if you could choose not to? I'm retired and I'd turn down any wage to get back into the harness. Maybe the guy who worries about his legacy. "John Smith built that buggy whip business right there" - Oh wow!! Who gives a flip.
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