Anavex Life Sciences Corp (AVXL)

[gburgin]

Interesting comment on Reddit on institutional price limits
like the much reported $5 limit...

"This is indeed a real thing, though it is going away as information becomes more readily available. Before the advent of computers calculating accurate market cap for a stock on the fly was difficult. This is why the DJ is a price weighted, rather than market cap weighted, index. My understanding is that the $5 rule was a product of an era when market cap wasn't as easy to calculate.

At this time most institutional investors have guidelines in place for the size of companies they can invest in, irrespective of stock price. Before BoA Citi did their reverse stock split there price was under $5 for over a year IIRC. Also the minimum for small cap investments for institutional investors that I have seen has been around $250 million. It just isn't feasible for an institutional investor to invest in a company smaller than that."