Boy you sure are seeming more negative than skeptical. But a 10:1 reverse split would be used to reduce the O/S, which in this case they do not need to do as there is more than enough room left in the A/S. You think they are aiming for an SS of 36 mil o/s and 3 bil a/s? That makes more sense to you?
What is certainly easier to achieve more than a 1000% day or one week run at the last minute, or an R/S that results in a nonsensical SS, is letting the market push it to a penny for at least ten days when you are getting record volume and attention. An r/s is useful when the O/S is high not low and closer to the max A/S. Does that make more sense?
Anyone else want to correct me on that? Plenty of room in the A/S left. Why R/S anytime soon when the pps wants to go up? This is not .0001. We will get them their penny and they know that. Why would they stop that? Folks are willing to push it to a penny so why would the company bother with a r/s just for a higher pps when they could have had it on Friday?
"For example, in a reverse 5-for-1 split, 10 million outstanding shares at 50 cents each would now become two million shares outstanding at $2.50 per share. In both cases, the company is worth $5 million."
I have to ask this again without all the extra jargon:
How would the company benefit from a r/s at this point? Who reverse splits to make a 10% (O/S)/(A/S) into a 1% (O/S)/(A/S)? Who gains anything from that? Do you think they want to hit there penny by pissing off everyone and not even profiting from it? They don't need it to reach a penny and they don't need it to reduce O/S, so just answer me one question and ignore the other questions in the last two posts: Why would they do it?
Also, the rule is to maintain the penny bid test price for AT LEAST 10 days and an R/S results in an increased pps that falls back down to where it was anyway, typically. So one last question: How does an r/s help them maintain a penny bid for 10 days. And if you up the ante to something like a 20:1 split, then I don't know how you expect a 18 mil o/s to not drop real quickly with a few sells.
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