My only real experience with a reverse split, prior to today of course, is with a company I used to work for. This was a solid company, making money, owned by institutions, and called one of the darlings of wallstreet. They ran into problems when mngmnt got too aggressive at buying out competition and bought some companies that had illegal baggage and wound up with a number of federal lawsuits to deal with. The bad press caused the stock to nosedive from $50 to $3. They did a three for one reverse to get the price up, but it never recovered. It tried to get from $9 to $12 for awhile and then back down and stayed in the $5 range. A bigger competitor bought the company out a few years later. I read about the reverse about the same time it was posted this morning and sold at market as fast as I could get the order in, and only lost about 30%. But now after letting the dust settle and having some time to think, I am ready to try to get back in at 2-3 and see what happens. I will have a little over twice my original position so will have enough horsepower to still have a significant position after the split. The stock will not vanish into thin air and may very well do fine at the new price point, it all depends on how it is traded by the MMs, just like now. If they choose to short it again it will decline until they stop, but I am sure that we will be able to get a little more profit either before it starts a significant decline, or play the downturns and upticks if nothing else. If worse comes to worse and the company starts dilluting again, WE can always earn profit shorting it on the way down, effectively getting the last laugh. I don't see that happening necessarily, but can see the disgusting MM manipulation resume.
AI
