EDIT: Sorry but unless the company also specifically reversed the A/S we still have 5 billion other wise yes you do have 5 billion
We will see when the 8K comes out..... good night all!
Type 2 Reverse Split:
This is the more common type of reverse stock split in pharma investing. Basically it differs from the first type in only one way and it can be deceptive to inexperienced investors because they don’t know what will happen next. In this method a company will ask permission to reverse split the outstanding shares only, while either omitting any mention of the authorized shares (except for in the proxy materials) or noting that the reverse stock split will not change the number of authorized shares. An example of this can be found in a recent Sunesis filing: “The amendment would not change the number of authorized shares of common stock or preferred stock. Accordingly, the reverse stock split will have the effect of creating additional unreserved shares of our authorized common stock and preferred stock (filing here).”
So going back to our 10-1 reverse split example, if Company A has 100 shares outstanding and only 100 shares authorized and effects a reverse stock split under this method, the number of shares outstanding would now be 10 and the authorized shares would still be 100 (in the Sunesis example this the “effect of creating additional unreserved shares of our authorized common stock and preferred stock”).
So why is this bad news for shareholders? Well, think about it for a second, what can happen here is that the company can now issue more stock at will (or in the example another 90 shares), which will dilute your position in the company. For example, before the reverse split the outstanding shares represented 100% ownership of the company (100 outstanding shares out of 100 authorized shares), after the split though they only equal out to 10% ownership (10 shares out of a 100 in the authorized treasury possible to deliver). And if Management issues 10 more shares you are now diluted by more than half (because now someone else now own 10% of the outstanding shares as well, and if there is only 20 outstanding shares and you only own 10 of them that now only represents 50% of the company).
AI
