Another way to look at it.... 20 shares priced at $50 = $1000 investment PPS dumps to $1 PPS value 20 shares is $20. Reverse Split occurs to get a share value to $20 Which is short $ 30 PPS of the $50 PPS you paid. However, to move the PPS to $20 , 19 of shares are removed from you leaving 1 share for you valued at $20 . You have a portifolio still worth $20 but the number of shares reduced 19 shares. To get your investment even, that 1 share has to rise $980 . What is the odds of that occurring in your life time. Hope you understand it is a screw job performed on shareholders
For some reason I thought the AIG reverse split was 1 for 10. It actually was 1 for 20. AIG shareholders were left with a fraction of the shares they had before the RS.
AIG's pps today is 54.24. Divide that by 20 gives you 2.71. So basically it has moved up by 2.71 - 1.25 = 1.46 since then if you do not consider the RS. That is hardly any appreciation during a period of 9 yrs.
FnF can move up by 2 to 3 dollars or more just on the hint of good news and that is without a RS. So you can imagine what the price will be 9 yrs after release.
In the period since its release and relist, the AIG common shares have risen to around $35 and pay a 2.36% common dividend. If that same result had happened with F & F there would be a much happier message board crowd here.
And, you know what? Where AIG's S/P was and now sits only validates the almost identical S/P put forward by Bill Ackman.
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