DXI Capital Corp. (DXIEF)

[Cougar6]

Not to be a naysayer, but the 4-1 reverse split makes no sense. If it was to get back up over a $1.00 to remove the risk of delisting. But if that was your concern, why not 10-1 to be safe.

There is a reason to keep the ratio low, that is if you are afraid of diluting your holdings. Since the reverse split is not accompanied by a reduction in the number of authorized shares it means that management could do offering or private placements of up to 75% of the current holdings at a 4 to 1 ration. That amount would be significantly greater, 90% at a 10 to one. You could maintain your ratio if you grant yourself a large enough share of the the stock (or you somehow build in a safeguard that does not dilute your holdings by issuing you share equal to what you dilution would have been).

So if your reasoning was to increase the price then a higher ration makes more sense - if you are looking to have more shares at a slightly higher price to so you can issue/sell more shares but not risk diluting your position in the company, a lower ratio is better.

I am hoping someone can tell me differently, but I don't see a good reason, with a current SP of below twenty cents, to only ask for a 4 to 1 reverse split.