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jerrylev

08/19/18 12:46 AM

#533921 RE: hotmeat #533919

I don't understand the logic behind less available shares but at higher price will cause more manipulation.

Let say that I am a small fish with 100K shares today and I day trade based on TA. So I will trade on 1/3 or 1/2 or 100% based on what the TA says. So I will sell or buy 33K, or 50K or 100K chunk. After R/S, I still do the same thing but I will sell or buy 33k/12= 2759, or 4166 or 8333 shares. If I am a HF, I will trade 1000 times that. So it is the percentage that I trade and it boils down to the same thing. More shares and lower price then I will trade with more shares. Less shares and higher price then I trade with less shares.

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The following is for other people.

The R/S does not affect your distribution in 2012. Let say if you were given 10K shares then at 1.5 pps, it is $15,000. After R/S, it will become 10K/12 = 833 shares at 18 per share.

10,000 * 1.5 = 15,000

833 * 18 = 15,000

Same thing.

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The R/S does not affect the cost of taking the company private or somebody will buy us in let say a year from now.

Before R/S, let say we will sell if there is an offer at $20/share.
After R/S, we will sell if there is an offer at $240 per share.

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An R/S does not affect the ability for the share price to go up because what counts is the PE.

It is equally difficult for the stock to go from 1.5 to $20 before R/S than from $18 to $240 after R/S.

People in the know don't look at stock price but they look at the PE. Unlike little people who stay poor because they have no concept of PE and EPS.