Verb Technology Company Inc (VERB)

[Cynomus]

The sting of an R/S, if it happens, isn't that nFUSZ may still do perfectly fine, and evolve into a profitable company. Rather it's that the expectation that buying stock at $0.33 that goes to $4 on NASDAQ will yield roughly a 12x gain. Now that 12x may be reduced to 2.4x gain down to 0.3x (loss).

I have a family member that bought in at $0.04 share on up to $0.50, they accumulated ~200K shares, expecting to have their million bucks at $5/share. At just 1:5 R/S that same 200K shares goes to 40K and at the same $5/share is now only worth $200K. The R/S strips the multiplier away from investors, unless we all get really lucky and the price goes up inversely proportionate to the R/S ratio. So in the case of my above example, the the price goes up to $25/share after the R/S. It could happen, but much harder, and if it could have made it to $25/share regardless, then the emotional strain of knowing it should have been worth 5M, is distressing to investors. Suddenly the lottery ticket stock turns out to be just another stock, one that tied up investment funds, that might have been more profitable elsewhere, during the 'long' holding period.