Replies to post #39887 on VirTra Inc (VTSI)

[Schneidku40]

Generally it's not the R/S itself that tanks the stock, it's the subsequent dilution. Most pinks that R/S do it because they're bumping up against their authorized O/S maximum, so the do a reverse split without reducing authorized O/S. Boom, more room for capital raising through share issuance. Since the value of the company doesn't fundamentally change, pps has to go down as O/S goes back up. That's why N_B thinks the share price will go back down to what it was.

If a company is worth $1m with 100m shares outstanding at $0.01 each, if they reverse split 10:1, company is still worth $1m but now there are 10m shares outstanding at $0.1 each. As the company dilutes back up to 100m shares outstanding, price goes back down to .01 to keep the company worth $1m.

The HUGE difference here is that Virtra is not selling shares to raise money, AND they lowered authorized shares outstanding along with the R/S.

I know you know all this, just pointing it out to others.

[fishhunter]

The simple way I look at this RS:

Would I rather buy a $3 stock or a 30cent stock?
As a customer would I rather do business with one with a $3 stock price or a 30cent stock price?
As an investor, do I take more seriously EPS of 2.4cents or 24cents?
Is EPS growth from 2.4cents to 3.5cents simply noise?
EPS growth from 24 cents to 35cents is legit and real.
My stock screener will not even dig into sub-$1 stocks.

I know most everyone here understands this sort of stuff. I just love looking at numbers like EPS of 30cents and the YOY growth numbers.

I am surprised that since the RS, no one has stepped forward to buy large numbers of shares. I thought there would have been 2 or 3 big bidders looking to buy 2 or 3% of the company each. Now is the time to do it.

Maybe there are some who cannot buy due to the D on the ticker?
Maybe some need to wait X number of days post-split?

Of course the overall market and especially microcaps is so sick right now. Sort of sad to see.