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Re: first mike post# 36892

Monday, 01/16/2012 10:06:03 AM

Monday, January 16, 2012 10:06:03 AM

Post# of 281156
If a company meets all other criteria except for share price all it has to do is a reverse split sufficient to get the SP above $5.

Reverse splits in no way whatsoever affect the value of an investor's holdings (nor do forward splits). The value of each individual share is increased (or decreased in the case of forward splits) in direct proportion to the decrease (or increase) of the number of shares.

Companies often do forward splits to keep their share price less than $100 because many investors are reluctant to buy shares above that price. (Berkshire Hathaway is a notable exception. It has never done a split and that,combined with its remarkable success, has resulted in a share price currently of $116,520! Most investors can't afford even a single share. I have to suspect that that tends to keep the volatility down!)

Splits do have temporary effects of the SP but that is because of what is perceived to have prompted the split rather than the split itself.

Because of the apparent common misperception among many KBLB share holder that they had received a "share dividend" when KBLB did a forward split, doing a reverse split to qualify for the NASAQ or other major exchange might have a temporary negative effect on the share price (AKA "buying opportunity"!)
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