Also from the blog:
Believe me, I understand everyone's disappointment about the reverse, but at the current level of outstanding, we would have to be making a trillion dollars a year to maintain a decent marketcap. I was very resistant at first, but experts in the market convinced me that we really have no choice. I knew we would have to do it, but maybe not for two years.
However, this does not have to be a bad thing. Most of the time, a reverse signifies tightening the float for major issuances. That's why typically people lose on a reverse. But, remember, I am not a typical CEO and we are not a typical company. A small reverse like this, coupled with an 8 billion share give back, should have nothing but positive effects. Ask yourself, would you rather have 1 million shares at .005 that's trading high volume and is backed by a solid company with good marketmakers, or 50 million shares at .0001 that is completely immovable and worthless with no marketmakers on the bid? It may as well be 0 at that point.
Remember, the post-split value of your shares is exactly the same. You don't lose anything if the stock doesn't plummet after the split. That's why it's being done in conjunction with the giveback. Everyone agrees that it gives shareholders the best chance of a stock that is rising instead of falling. I have been convinced by some really smart people that if there is any chance of getting this thing moving, this is it.
Even after the split, it may begin to drop a little because of shorters who will try to get downward momentum. That's when the bulls have to begin to support the stock and take those shares causing the shorts to cover. Then, once the initial short covers, it should be a rocket ship. That's the consensus by a group of guys who are a lot smarter than I am. I feel very confident that this is a positive thing.
