AI
Bull, my goals here have always been pretty high yet I must admit that our odds of reaching my target (from $0.40 to $40 within 10 years) must now be split adjusted and the likelihood of my highest target seems less likely. On the plus side I still believe that we will see the value of our shares grow by a nice multiple over the next year (due to marketing, sales, etc.) and it appears that the management team is interested in creating long term value rather than a short term pop. IMHO, their actions are proper for a team trying to build a long term growth company rather than a fly by night penny stock.
If your belief has always been that the company will be bought then I should point out that (provided retail investors don’t panic and dump shares) the market cap after the split will be the same as the market cap before the split. If a buyer decides to purchase Vu1 for a multiple of the existing market cap then your share of that should be the same regardless of whether or not a split occurs.
Re: “My experience with reverse splits have so far NEVER been a pleasant experience. What generally happens the share price will also go up by the amount of the split then within weeks it is well below the share price”
The vast majority of the reverse splits that I’ve seen perform exactly as you’ve indicated; on the other hand, the vast majority of the reverse splits that I’ve seen were performed on companies with a much greater daily volume. The majority of the shareholders here appear to be holding on to their shares so I don’t foresee a significant price drop unless the retail investors start to dump under the false assumption that the price must fall. There are a number of shorts on yahoo who are trying to support that premise; personally I think the long term investors here should-not and do-not need to buy into that assumption. You should never setup yourself up for failure; FYI, I have seen reverse splits that worked as intended. In the case of Vu1 the intent is to improve Vu1’s chances of moving to the NASDAQ yet I’m certain that the intent is also to attract new investors to the stock as it moves beyond the realm of penny stocks.
I highly recommend that you take a look at the Wiki definition for “OTC Bulletin Board”. Here is one little excerpt: “Stocks traded in OTC markets such as the OTCBB or Pink Sheets are usually thinly traded microcap or penny stocks, and both retail and institutional investors generally avoid them, because of fears that share prices are easily manipulated and there exists a potential for fraud. The SEC issues stern warnings to investors to beware of common fraud and manipulation schemes. As such, most companies choose to list on more established exchanges such as the AMEX, NYSE, or NASDAQ once eligible”.
It should be pretty clear why management is now making small step towards their long term goal of moving up to the NASDAQ. I still believe that publicly proclaiming their intentions now is much better than waiting until after their marketing campaign, sales and any sort of pop that will go with that.
Please keep it positive and please don’t help create a self fulfilling prophesy that the price must fall.
Best regards,
Robear
P.S. Ginch, thank you for the reply… I’m off to lunch now. Hopefully I’ve given everyone another way to look at this
If your belief has always been that the company will be bought then I should point out that (provided retail investors don’t panic and dump shares) the market cap after the split will be the same as the market cap before the split. If a buyer decides to purchase Vu1 for a multiple of the existing market cap then your share of that should be the same regardless of whether or not a split occurs.
Re: “My experience with reverse splits have so far NEVER been a pleasant experience. What generally happens the share price will also go up by the amount of the split then within weeks it is well below the share price”
The vast majority of the reverse splits that I’ve seen perform exactly as you’ve indicated; on the other hand, the vast majority of the reverse splits that I’ve seen were performed on companies with a much greater daily volume. The majority of the shareholders here appear to be holding on to their shares so I don’t foresee a significant price drop unless the retail investors start to dump under the false assumption that the price must fall. There are a number of shorts on yahoo who are trying to support that premise; personally I think the long term investors here should-not and do-not need to buy into that assumption. You should never setup yourself up for failure; FYI, I have seen reverse splits that worked as intended. In the case of Vu1 the intent is to improve Vu1’s chances of moving to the NASDAQ yet I’m certain that the intent is also to attract new investors to the stock as it moves beyond the realm of penny stocks.
I highly recommend that you take a look at the Wiki definition for “OTC Bulletin Board”. Here is one little excerpt: “Stocks traded in OTC markets such as the OTCBB or Pink Sheets are usually thinly traded microcap or penny stocks, and both retail and institutional investors generally avoid them, because of fears that share prices are easily manipulated and there exists a potential for fraud. The SEC issues stern warnings to investors to beware of common fraud and manipulation schemes. As such, most companies choose to list on more established exchanges such as the AMEX, NYSE, or NASDAQ once eligible”.
It should be pretty clear why management is now making small step towards their long term goal of moving up to the NASDAQ. I still believe that publicly proclaiming their intentions now is much better than waiting until after their marketing campaign, sales and any sort of pop that will go with that.
Please keep it positive and please don’t help create a self fulfilling prophesy that the price must fall.
Best regards,
Robear
P.S. Ginch, thank you for the reply… I’m off to lunch now. Hopefully I’ve given everyone another way to look at this
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