The reason they say it here is, simply, that the company have viewed this as a dividend. The word is used in their PR disclosure.
It is explained in their 'rational' for, unusually, actually issuing a Forward split at this absolute rock bottom, pps.
Normally F/S are issued when the share price is growing to a point where it deters ' psychologically' for some strange reason
small 'investors' from buying. They like to buy in large amounts.
Naturally, on ex-divi date, the pps adjusts to the split. But, if it goes according to plan, the pps takes off again — at least for some time. This gives the holders before the split a form of 'dividend' by their increased share holding increasing in pps. But this happens only if the pps increases.
A reverse split usually has the opposite effect, as the reasons which had caused the company's shares to be so low are usually still there, and it brings in the short sellers again forcing the price down.
There are always exceptions like, for instance VGZ. They had a reverse split of one for 20 when they were selling at about ten cents. They are now over $8.00. This makes the equivalent price before the split at .40+ cents. But generally, the pps falls.
Back to GWGO. Why it is viewed by the company as a 'dividend'
is that they view their share price is undervalued. It is at rock bottom so it cannot fall any lower.
If as the company indicate, and as you say Vagabond, and some others feel, the company is soon to start releasing some good PR's updating their website, and behaving like a professional company to move up from 'pink sheets' then the pps should move,
and can only move, in one direction - UP.
That would give current buyers at the price of .0001 and who qualified for the split - a PROFIT.
Consequently this F/S is a form of 'dividend' in this particular case.
Dividend; Forward Split; profit? A rose by any other name would smell as sweet.
I know, you Vagabond, already know most of this, I have included it for those who are new to the game. I am just saying, to yourself and a couple of others who tackled me on the 'dividend' why it has been used - in particular by the company. It explains why they issued a forward split, when most other companies tend to do the dirty on their shareholders by issuing a reverse split. It explains why the company keep saying they are NOT contemplating a 'reverse split'.
It all rests now with whether the company do keep faith to their new Presidents e-mail to shareholders. We can only watch and wait.
