Plandai Biotechnology Inc (PLPL)

[Kool Aid Man]

Microcap Reverse Splits 101

I agree 100% that a

"RS of AS is rare. Don't expect it. OTCs RS the OS. They typically leave the AS and preferred alone. They'll be sure to leave themselves plenty of headroom in the share-structure for future issuance."

At the moment 75% of the 11 billion authorized shares are issued and outstanding. A 1-for-100 RS would reduce the current OS from 8.2 billion to 82 million. An "ain't happenin' " equivalent reduction in the AS would also reduce it to 110 million. I've never once seen an equivalent reduction in OTC. Most often I see a head fake "reductions" in the AS which are, in fact, massive increases in the AS.

So while an OS might be reduced at a rate of 100:1 the AS is typically (*cough cough*)"reduced by a fraction of that. "IF" PLPL management pulled a 100:1 RS and the current AS were "reduced" from 11 billion to 1 then that would be the the equivalent of a 9,900% INCREASE in the current AS!

That, dear people, is how managements create the vast quantities of new shares they want to grow the company and enrich themselves. As anyone can see, an OS of 82 million would be a small fraction of a "reduced" 1 billion AS. And as we know, shares are authorized for a reason.

LASTLY (again)

At .0004 the most someone can lose is -75% if it drops to .0001.

At .04 (after a 100:1 RS) the most someone can lose is -99.75% if it drops to .0001.

At .4 (after a 1,000:1 RS) the most someone can lose is -99.975% if it drops to .0001.

At $4 (after a 10,000:1 RS) the most someone can lose is --99.99749999999999% if it drops to .0001.

As you can see it makes little difference if a stock falls off a 100 foot cliff or a 10,000 foot one...yer just as dead if it happens. This is how new management/ owners often destroy old bagholders and start fresh.