Delcath Systems Inc (DCTH)

[AKsquared]

With a price target of $16 a reverse split was pretty much expected. I recently made a 200% profit on CBIO r/s - had to wait a few weeks, but it was worth it.


There are few reasons for a reverse split, but in the case of Delcath, I imagine the strategy behind it is to remove the stigma & negative perception of being a penny stock - and to be more in line with competitors, while reducing the number of outstanding shares. A lot of institutional investors can only invest in stocks that are over $5 - so a split would be more attractive to a broader range of investors.

Based on one simple fact: Delcaths improved survival rate - I firmly believe that the intention of this split is to finally bring Delcath back from the dead.

I wouldn't be surprised if the news of a merger or acquisition came soon after the split.

there are many examples of reverse splits in which a company's shares not only survived but prospered:

• Famed U.S. Government bailout candidate American International Group ( AIG ) was close to being yanked from the New York Stock Exchange when its stock sank below 2. The company did a 1-for-20 reverse split that sent the price above 20. Today, AIG trades close to 60.

• When the recession pummeled Citigroup ( C ) in 2011, the company executed a 1-for-10 split that boosted its shares from around 4.50 to about 45. Citigroup's current share price is more than 55.

• Priceline.com (PCLN) did a 1-for-6 reverse split in 2003, taking its share price from around 3.50 to 22. Today, it trades at more than 1,164.