As an AMEP stock holder I need to know the following regarding proposed R/S:
What is the business purpose of the split? (i.e. management's plan not just speculation) Is it: a) to increase stock price to enable a move to a different exchange. b) to reduce the outstanding number of shares so the company can raise funds by selling more stock? c) to deter a potential buyout? d) a combination of the above. e) something else.
Depending on the answer, the R/S may or may not be a good idea. Regardless though, by requesting a 1 for 25 R/S with no adjustment to the A/S, AMEP is asking me give authority to dilute my investment so much that it could become practically worthless(even assuming that the preferred stock reverse splits along with mine). I will not give management such a huge pool of shares to work with since as an investor this proposes a new risk to me.
Maybe management could persuade me to vote for an R/S by explaining more about the purpose and buiding some protection in for existing shareholders (i.e. decreased A/S and restrictions on unallocated stock).
Please reply if you think I am missing something, thanks
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