MSLP recently had a reverse stock split. Below is a very illustrative post of what we can expect from the pps post-stock split. It’s by Scooter28 on another board. Will MSLP be the exception and not the rule?
“…interesting you mention reverse split. The posters who think all is well with reverse splits havn't got a clue. They show the math and the dollars are exactly the same after a reverse split. Very true but the major studies on the subject shine the spotlight on reverse splits and give the real story on what happens to companies share price post ex-split date. THE seminal, formative, go-to paper on the subject, and referenced all over the world, is: "Return Performance Surrounding Reverse Stock Splits: Can Investors Profit?" by Kim, Klein, and Rosenfeld. Google it
... the first paragraph tells you all you need to know. KK&R studied 1,612 companies following reverse splits and found "significant downward price drift over the next three years after ex-split date." Still in the first paragraph, they say that "investors should be able to exploit the market inefficiency by short-selling companies after a reverse split." (they also go on to talk about the new and higher price that is supposed to get institutions to buy the stock, i.e. 5.00 price ... new buyers etc. and destroy that premise as well ... (everyone knows it is an artificially inflated price)
Google and read the opening few paragraphs ... A reverse split of **** stock would be a REALLY BAD THING!”
