Daveywavey1:
Putting your sell in advance, even if you know the split ratio, is a bad idea. It gives MM's the advantage of seeing your hand before the open, to adjust which way to quickly run the stock, make more money off of you, and anyone else who has done the same. It does not put you "first in line" to sell, that doesn't exist in pink sheets.
Contrary to belief, OTC MM's decide manually who to fill, there's a human at the screen. Always keep that in mind. Despite technology, a computer doesn't know how to psych people out like a human. OTC MM's only switch to automated when the pace of a moment risks losing sales to other MM's. Or lunch.
Unfortunately, to "ride and execute" properly, you will have to be at the screen at the open. Otherwise, you've left your cards and money on the table and walked off whistling to use the men's room.
At the split, the open price starts at the target price, where the company wants the price to be. The ratio is then reverse engineered to match that. The ratio's only a rumor until actually executed. At that point, MM's have met their obligation to the company and can do whatever they want with the price.
Don't worry about the ratio. Regardless of the ratio, your job is the same. Don't hold because you like the ratio, let others buy because they like the ratio. If you hesitate, you'll get to know how toast feels. At the split open, regardless of ratio, everyone will get "equal value" for what they put in. Equal value will be based on .0001, so you will need to keep a calculator handy.
There's A Formula
Fortunately, your math is easy.
Your .0025 cost basis puts the value of your shares to 40 cents to the dollar before, meaning you entered the split already down 60% (-6K), for which you don't get credit. You already know that. As a result, you'll get credit 4K as the split happens.
In your specific case, because this calculation is based on everyone's individual cost basis, to calculate your actual losses and break even, you need to multiply the new open price by a factor of 2.5 to know your breakeven (get the 10K back).
If it opens at .10 cents, you'll need it to hit .25 cents, if it opens at $1.00, you'll need $2.50 - a 250% uptick on a RS. Sadly, pigs will fly with turds that taste like honey before that ever happens. Execute proper damage control and get out.
Conclusion
Essentially, if you cash out before the split at .0001, you'll get $4K back. If you properly exit the split in the first 30, you'll likely get $3800 back, +/-, based on speculators and luck. If you hold now and it pumps, you can get the whole 10K back or more. If you ride the split and get out fast, there are safe techniques to turn the $3800 back into the original 10K.
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