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Re: Dumotier21 post# 21697

Tuesday, 04/15/2008 11:28:14 AM

Tuesday, April 15, 2008 11:28:14 AM

Post# of 41740
A reverse split can be part of a positive event.

If a RS is done while a company is still struggling and moving in the wrong direction, it is just smoke and mirrors. It is not often viewed as positive and very rarely does it have a good outcome in this situation. This is desperation and very obvious to most investors.

However, if a company is moving in the right direction it can be very helpful and positive. When a company is; increasing sales, improving margin, achieving or closing in on profitability, i.e. getting on its' feet, the results can be good.

With good things happening; a RS can help move to a higher exchange, allow institutional investing, reduce share count for future issuance, etc. Most people would rather see the shareprice move way up on its own, but sometimes you need a little jumpstart.

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