Replies to post #26696 on Baltia Air Lines Inc. (fka BLTA)

[whathen]

The company has no intention of doing RS anytime soon. Chances by the time they do it you would have already sold. Not logical to do RS before they have any revenue.

[CCruzNY]

I want to point something out to make it clear. A reverse split is not always a bad thing and not my fundamental worry. I just recently went through a 4/1 RS on INO and it has panned out very well. The intention for the RS for that stock was to move it off the OTC markets and get it on NASDAQ where all the institutional investors that had already bought into it, wanted it. So get it out of your head that an RS is a bad thing. An RS for BLTA will pan out to be a great thing when it happens because it will make it viable to probably go from OTC to the NYSE opening the doors to were most investors feel comfortable now investing thus driving up the price of a less dilluted stock if the financials support it. (which based off what the possibilities for BLTA are, should be very well)

My issue is with dilution. When you add 1 Billion shares to a stock and the price stays the same you can almost compare it to inflation of a currency. My request for a plan on how BLTA is planning to handle this is the equivalent to asking Ronald Regan explain to all off us in the 80's how he was going to fix inflation.

You have to all understand that it's all fine and dandy that the management portion of the shares can't be sold, but Private Placement shares can be, once off restriction. And I highly doubt the new shares are for management, it's to be sold for fund raising purposes. (Or at least I hope that's what they are for to get the doors open) Alot of PP shares are coming off restriction and will continuosly do so. There is no real need for PP holders to be long on BLTA. They double thier money and can purchase even more PP, close to double the amount they originally held, and do it again in 6 months....it's a beautiful play on this stock. All while non PP shares get dilluted. At some point, someone respectable with a strong following will analyze this company down to the very last pubic hair and based off thier assesment will drive the price either up or down. At this level of dillution, there's only one direction the price can go if it gained any traction. So yeah, dillution is a major thing to consider when investing in this stock.

So if your plan is to sell this stock on the OTC at a profit, your ticking time bomb is an article that breaks the fundamentals down. So start making noise about these guys creating shares out of thin air until they stop or explain how they plan to handle it. GLTA.

[FT1]

Reverse Split

As a standing rule, when a company announces a reverse split, if I am a shareholder, I sell immediately. Without exception. It will save you a great deal of money if you do that. If you followed reverse splits, 19 out of 20 or worse drop significantly in value after the split and you lose. Like someone posted here, 30% or 50% drop easy. I've made the same observation.

Case in point, a smaller environmental company called Texcom, symbol TEXC.

25 July - BOD meeting where shareholders approve 1:10 reverse split. Stock trading at $0.25/share
15 Aug. - Split becomes effective with new stock symbol for 20 days. Stock trading at $2.50/share
Mid September - Stock trading at $1.60/share
16 Oct. - Stock trading at $1.15 bid / $1.30 ask

That is a perfect example of a typical reverse split both in time line and in loss in stock price. I hope that helps.

I do continue to follow the stock after the split though,because after that stock drops for a while, and IF mgmt makes the right moves, it can take off again, giving you a discounted and safer entry.

While with BLTA, mgmt is saying they won't do a reverse split, my take on this from experience is that they probably won't do one any time soon. And if they do, it will be known to you as a shareholder. They are a listed company and it's a material event. So it must be disclosed. Giving you the time you need to sell.

With the billions of shares outstanding they will have by the time they launch and want to expand the airline and need access to significant larger $s, the players they then deal with may very well require a reverse split to slim down the company for Baltia to get access to that money. Why? Because any larger investor will assume a reverse split will have to take place and they will want it done BEFORE they receive their stock. Also, it makes the company more attractive to larger investors. Some won't even take a position in a small company which such a stock dilution.

So I wouldn't worry, it's not an issue for current investors for now.

On a separate note, I notice some posters disappointed that the stock hasn't run up as a result of the Phase 3 announcement. There has been so much stock issued and is hanging over this price at various levels, that each time the stock moves up, it will hit levels of large chunks of stock that it has to chew through to move on. Some of these big PP investors will sell off chunks of stock at lower levels to get their principal back, and hold the rest of their shares at no risk. The smaller investors are holding all their shares for the big bang and 10x, so you may assume everyone else has the same strategy. I'm sure that's not the case.

I'd say just let it gyrate around, if and when they fly, which should be soon by all accounts, you'll get your bang for your buck. Just requires patience and a few month (hopefully not more) viewpoint rather than day by day.