I have no idea if Harvey Vechery will be doing a reverse split or not but the reason it’s brought up on this site is an obvious one, because it’s a logical option for a publicly traded company to consider.
Most owners of publicly traded companies would be forced to consider this option if they were in MAXD’s position. Why? Because the stock has been diluted beyond belief. Because Greg Halpern is a failed businessman who continued to borrow money instead of earning it the old-fashioned way. Because there were no revenue deals in 14 years of failed attempts. Because toxic note holders would convert their notes into shares and then dump them with machine like precision with no concern for the shareholders.
Harvey Vechery was the opposite of a toxic lender. He bought out all the toxic debt, at the request of MAXD management, to help the company. He then held the shares instead of selling, which was for the benefit of the shareholders. The assumption has been made on the boards that Vechery converted all his notes and then sold but that is not true.
Meanwhile, Halpern kept going back to the well and authorizing more shares. Then he would go back and borrow more money against them and the vicious cycle would continue. On the other hand, Harvey has not sold his shares and has not converted all his notes. He locked down the shares with the transfer agent to prevent Halpern from making any more desperate moves. Vechery was not only thinking of himself, but the shareholders as well when he filed suit against the Halpern and the company. At his own expense I might add.
Doing a reverse split has a purpose if done properly. It is a proportional transaction based on percentages. The result is that you have fewer shares, but their value should be higher if the company does their job properly. Timing is important, yet I don’t see the logic when a stock is on the Expert Market and shows a thousand zeros as the current value. .
There are also issues such as who will invest in a sub-penny stock as many market makers won’t even deal with stocks in that category. My point is there are reasons to consider a reverse split, but the timing of that move would be important. There are also reasons not to split. I have no way of knowing if that’s even being considered. I do know it was considered in the past for MAXD for all the reasons mentioned.
AI
