A few years back I bought into a company called Concur Technology (CNQR) it was trading at $2.00 a share. It was bleeding red ink at the time however, their sequential growth revenue was on a upward trajectory and it looked like it would go cash flow positive within a couple of quarters and it did. I owned 10,000 shares and this stock started to perform. Shot up to $17.00 a share and I sold because there was too much resistance and it was stuck at that price, I saw other opportunities. I few years later that company got bought out at around $125.00 per share. If I had gone long that would have been $1,250,000.00 to me (instead of my little $170,000.00 at the point of sale). My point is, after a consolidated reverse split...you will end up with less shares however, the upside potential in this type of tech company is huge and there is demand for this product. I know, everyone wants to buy two and a half million shares of some unknown pinky stock and watch it go to over a dollar. This very rarely happens down in pinky land.
I know about the reverse split rhetoric and those that got burned. I just feel this guy is serious about this venture and knows that the institutional investors will take notice on the NASDAQ. If he wasn't serious, why wouldn't he dilute the remaining outstanding shares before this reverse split. The question you have to ask yourself is would I rather have a million or two million shares that is going to bounce around at 2 & 1/2 cents (on a good day 3 & 1/2 cents) or would I rather own 20,000 shares of a company traded on the NASDAQ with much stronger upside potential. Despite all the negative rhetoric about past performance...I am long on this stock. Again, why wouldn't they dilute all the way up to or close to maximum outstanding shares and then exercise a reverse split instead of getting off here. Why would a young marketing executive with a proven track record leave a company that she has substantial tenure at for a pink sheet company that has a market cap a tiny fraction of the company she is leaving? I am long ATDS.
