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You'll quickly see that a forward split is pure nonsense logic for HLNT. A 1 to 5 forward split would increase the OS to 9 billion shares and decrease a .015 pps to .003. That's gonna be some real nice numbers to go to investors or JV partners with. Read below and you'll see the logic of a Reverse Split ON GOOD NEWS.
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This stock split two for one at $40 a share and ran up to $40 again, all within six months. It is just incredible how fast this company is growing. The stock is now at $42 a share, and there is talk of another two for one split. It has been great to have more stocks like this one?.
This is obviously the sound of happy investor. Stock splits are looked upon as being good news because the price will often continue to increase, given time. However, even though many stock splits are positive sadly that is not always the case. Many times the price will soar for the split only to fall back to previous price levels adjusted to the split.
II. MECHANICS OF A SPliT
Stock dividends and splits have basically three occurrences: announcement date, record date and payment date. To qualify for split the investor must be the owner on the record date. Therefore, the stock must be purchased at the appropriate time before the record date to qualify.
Announcement date
This can be considered the most important date because it tends to have the greatest positive impact on a stock?s price. Even companies that do not react well to a split tend to move initially higher on the announcement. Rumors of a split sometimes leak out ahead of the announcement date, which also tends to push the price higher.
Stock split and stock dividend announcements are given to the media on the announcement date. The company provides all the important details of the split and often a brief history of the company?s previous stock splits, which it sends out in the form of a press release. The company considers a forward stock split a positive event and wants to get as much free media publicity as possible.
III. PRICE WEAKNESS
It is not unusual to see some price weakness either after a split announcement or shortly after a payment date. Any number of things can cause a price to drop. For example speculators could be exiting and taking profits especially if the price has been flat for a time. Some investors might fear that the price action is over and expect a drop and they would rather sell too soon than too late. Obviously others see this price weakness as a buying opportunity and they are the investors who drive the price upward. ON GOOD NEWS ONLY FOLKS
IV. WHY DO COMPANIES HAVE STOCK SPliTS
Ordinarily the reason a company decides to split its stock is to make it more attractive for investors to purchase. The logic is that more people will buy the stock at $ 30 rather than $60. Obviously as more people buy the stock at the lower price the stock will rise in price. The split makes the stock more affordable to individual investors. WHEN YOU HAVE A .015 PPS AND 1.8 BILLION OS THE RS IS THE WAY.
Whereas a $120 price might be too high for many, a $60 or even $30 price will get them to buy the stock. However, there is no assurance that stock will continue to rise in price after the split. Often a stock price declines in price after a split which can be true particularly if a stock splits more than once in a year.
Another reason for a company to have a stock split is to make more shares available thereby broadening its stockholder base. The stock becomes somewhat more marketable and liquid. Somehow positive publicity also fits into the stock split scenario. A company might use a stock split announcement to soften the blow of some negative news. On the other side of that coin a company might use other good news GOOD NEWS GOOD NEWS GOOD NEWS to soften the blow of a reverse stock split.
V. NOT ALWAYS TWO FOR ONE
Not all stocks split two for one. Some other frequent ratios for stock splits are three for one, three for two and five for four. However, regardless of the ratio used the stock price will decline and the amount of shares outstanding will increase directly in proportion to the amount of the split. Splits do not give the investor something for nothing in terms of financial gain. Splits do not give the investor something for nothing in terms of financial gain. Splits do not make a company better or more financially sound.
VI. WHY DOES THE PRICE RISE
A price can rise for many reasons, due to pressure from one fact or several factors combined. There are still novice investors who do not realize the price is adjusted to the split. Brokers often hear the confused and complaining phone calls asking what made the price drop so suddenly especially on a three for one split. Though this group is small it is part of the picture.
Speculators buy either before or soon after an announcement because they believe the price will rise. These short term traders pick an early exit price at which they will take profits. Their actions account for much of the price weakness that appears shortly after many splits, where they sell. Investors in general still believe the publicity that a stock split is good news for a company. Although the stock does become more affordable for the individual investor, a forward split does nothing to add real value to a company.
VII. REVERSE STOCK SPliT
One of the primary reasons for the forward split of a stock is to lower the price. The opposite of a forward split, the purpose of a reverse stock split is to raise the market price. LIKE HLNT NEEDS TO DO, FAST. Companies believe that raising a price will make the stock more attractive for trading. Commonly reverse splits are one for three, one for 10 or one for 20 but they can be any quantity. In the one for 10 situation, one share of the new stock is received by the shareholder for every 10 shares owned. Instead of having the original amount of say 100 shares, an investor ends up with 10 shares, but the new price is 10 times higher.
Reverse splits are often considered a death knell for a company, but that is not always he case. ON GOOD NEWS LIKE EVEYONE SAYS IS COMIN Some companies reorganize and pull themselves together to become successful. One of the major difficulties is the selling by disappointed investors. Even though the reverse split significantly increases the market price, active selling frequently hammers it back down. To counteract this tendency companies will sometimes try to time a reverse split announcement to coincide with good news. NUMERO UNO PEOPLE IS THAT GREAT NEWS THAT IS COMIN. PPS WILL HOLD AND CLIMB ON GREAT NEWS. COMPANY THEN HAS SHARES TO WORK WITH. LIKE GETTING RID OF 6 MILLION DOLLARS OF DEBT.
AI
