Replies to post #25389 on VelocityShares Credit Suisse 3X Long Crude ETN (UWTIF)

[RBKissMyAs]

We've been through this discussion a zillion times here so we will just have to disagree.

[DrContango]

Yes it matters - Let me tell you why .....

THTB (the powers that be) know more than you may think....

So don't kid yourself by thinking that it does not matter....

Sorry, Quantum, by KissMyAs is absolutely correct. A reverse split absolutely does not matter.

UWTI is NOT a penny scam stock; in fact it is not a stock at all. It is an ETN and it's an extremely complicated derivative.

Its value, day to day, depends upon the value of a rolling index of front two months WTI oil futures.

An RS might not affect your bottom line immediately but but it gives UWTI a lot more room to down ....

UWTI will experience the SAME percentage rise or fall, whether the stock is trading at $1.70 or $170 should there be an unlikely 1:100 RS. Regardless, there MUST be an RS in the not too distant future because the NYSE requires a $1.00 minimum share price.

Sadly, a RS will also increase margin buying power (currently a minimum of $2.50 is required per share) enabling those so inclined to purchase even more.

Therefore if it is rumored that there is an RS in the works that means there is a lot more to the downside to come.

Again, neither a RS or even a rumour of a RS implies or affects any directionality of this ETN. In the long run, there is always downside to come in a triple leveraged ETP which is based on futures in deep contango. And in the extended future, this instrument will follow an asymptotic curve towards zero.

I suggest you review some of the reading material suggested here:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=119638563


Doc