Plastic2Oil Inc (PTOI)

[the big guy]

Implementing a Reverse Split helps management solve their cash flow problems, but screws existing shareholders. Proponents of a Reverse Split say that it does not matter because the dollar value of a shareholder's shares does nto change. But...that is not true in reality for a money-losing company. If a company is making money, then it is true. The PE ratio does not change. However, if a company is money-losing, the shares have that much further to go until they have a positive PE, therefore the price will fall after the Reverse Split to a level that reflects that.

If a company is losing millions per quarter like JBI and they do a R/S, now each share is losing that much more, yet is a multiple of the original price... not a good thing.

When I get my circulars in the mail about a "special" meeting I immediately look if a Reverse Split or Consolidation is to be approved. If it is, I abandon the stock immediately.

THe next step after the Reverse Split is issuing more shares... as the share coutn is reduced, it is like printing money.

Now JBI... even at 100:1 (one of my companies did that this year).... it would still be difficult I think.