Hi Ray,
It affects us all the same way. It simply lowers the stock count, raises the stock price, but the market cap remains the same. I'm all for it if they use it to up list. I can't speak for Dart but imagine he feels the same way. Institutional investors can buy once it gets on an exchange, and that should help the stock see fair value.
A mock example:
So let's say there are 100,000,000 shares and the market cap is 100,000,000 that would be $1 a share.
If it's a 4:1 reverse. The price of the stock would go to $4 a share; the stock count would go to 25,000,000; and the market cap would stay at 100,000,000.
As for the warrants, the same thing. Using the same 4:1 mock example, where the old stock price was $1, but then goes to $4. If he is able to exercise, let's just 10,000,000 warrants, at $.50 and that would represent upon adjusted split he would only get to exercise 2,500,000 warrants; and the exercise price would change to $2. The company would get the same $5,000,000 if he bought them; and he would be able to slowly release to the market at the new stock price of $4, so his profit would change ($5,000,000).
And so really what a split does is give us all an opportunity to have less manipulation of shares, due to less count and a bunch of new buyers. Anytime they feel they have the cash to get away from the day trader swing trading, well I'll be happy about.
My $.02 on splits is they should be done when the market cap is low enough so that folks don't think they can get a better deal on the market cap. There are some who sell their shares as they get convinced it's going to drop and then they miss the opposite move. I truly believe it is based on value and not stock price. Not all reverse splits are bad. Those that R/S lead to more interested buyers, who might not have bought in on an OTC, who are trying to buy reduced float is always a good thing in my book. :)
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