Replies to post #19140 on Relief Therapeutics Holding AG (RLFTF)

[333randy]

Its not bad as far as losing money but u want more shares at more dollars but its not like anyone looses money

[mantis]

Because in 99% cases in OTC market the reverse split is followed by issuing more shares, which is called dilution. Basically you own a certain percentage of a company and after the RS is stays the same , but if a company starts printing and selling more new shares your percentage goes down. In some case your shares gets diluted to zero. Imagine your 400 shares become 100 , but then the company issues 2 billion more shares , so you own 20% of what you used to own interms of the percentage of the company. I don't believe this is going to be the case here. They have cash and even if RS they will not print out new shares.
Hundreds of cases in OTCBB where the stock is at .001, they do a 1000:1 rs, stock goes to 1$, they print 100 million more shares , stock slides back to .001 in a year, they do another Rs and so on. All about finding new suckers and a new 'winning ' story. Again this stock is different in my mind.

[Chasing]

but it's bad bc 70 to 90% of the time the pps drifts back to the exact same price as it was prior. You can find countless penny stocks that have been through the same process multiple times for each stock.

[Markmark1]

Yes. That is correct, it is a share restructuring and you would remain whole in whatever ratio the split makes. I don't believe it to be a negative thing in THIS instance either. I have some experience in the capital markets and it is often logical course that things (like O/S) need to be tidied up to align with and allow for the growth and development of RLFTF that we all expect.
Uplistings often require these changes and they ultimately allow for larger entities to invest in Relief. IMHO. Good luck to all.

[07up]

A r/s on this OTC has an extremely negative connotation simply because it almost always turns out bad for shareholders.

Just hearing their company they are invested in will do one will send investors into a panic - they will dump their shares, the pps will drop severely and quickly. Investors will see their pps going down and more will sell until usually its worth only a fraction of its previous value. Herd mentality gets started and down goes the price and your hard earned money.

Depending on the integrity of the company, here on the OTC, many CEO’s will do an r/s just to pump more money into the company or into their pockets without any regard for the shareholder.

In some cases an r/s designed to uplist to a higher Exchange may work out well in the long run
but investors know the word reverse split is a death sentence to their share price.

Remember it’s the “PERCEPTION“ of the company’s value that determines weather they buy, hold or sell.
The facts may not matter much.

[Dash82]

It’s not necessarily a bad thing. Companies that are bleeding out tend to do a RS to buoy the price and maintain listing status or keep from falling off investor radar. In Pennies for instance many investors won’t touch trip zero stocks, but a RS can keep the stock alive.

However, this is only one reason for a RS. Many people here are perpetuating the idea that RS leads to decline in value, when it is the other way around (a loss in value precedes the RS). A company doing a RS to keep from being delisted is is not comparable in any way to a company doing a RS to uplift for the first time. Their trajectories are completely different. Don’t worry about a RS unless we’re already talking.

[ratna1]

Because in most cases a reverse split will lead the shareprice down. Usually back to the exact same level it had pre-split...
Look at that downturn for the stock spoken about here - HGEN - lost about 50% in just a week or so...
RS is a desperate last measure to take that is best avoided. Moreover it does not change the market cap initially and this is what professional investors look for if it is bloated or sustainable!
Only daytraders in pennyland can come up with such absurd ideas that that the number of shares has anything to do with price discovery.

[cybermich]

imo a couple things must be in place for the reverse split to work well (in shareholders favor)..

1. The reverse split MUST be supported by good fundamentals, preferably GREAT news that sustains the current market cap (as you mention the calculation for market cap stays the same.. its still number of shares times share price).. but if the reverse split is done ONLY for appearances (i.e. getting to a higher exchange) but is not supported by fundamentals then the stock will probably be shorted back down to lower levels AND you will own less shares.. equals you will lose money.

2. The reverse split preferably will be purposeful in that it gets the company's stock to a higher exchange AND because of its fundamentals it gets support by Institutions who buy more shares.

Bottom line.. at the price we are at now we are around X market cap (to keep it simple lets say 1.5 Billion).. IF we have the goods.. the company will be valued at Y (a market cap that reflects a certain projected revenue times a multiple).. if we were to get a 1 for 10 split tomorrow and at the same time we got an announcement that our drug was approved.. a person with 50,000 shares would have 5,000 shares..

IF it was projected that the market we are addressing will support a 15B dollar market cap.. the share price would still go up ten fold but from the NEW share price after the split - example, the new share price after the split would be $6.00 (but you would have 1 tenth the shares.. but then the stock price at 15B would be $60.

If you held through the split.. AND if the drug was very successful bringing our market cap up 10 fold.. then you would own 5000 shares at $60 a share.

On the flip side.. if the drug doesn't work.. or is just mildly successful.. these numbers could go the other way..

imo if we have the goods.. longs should make money with or without a revers split. However, it may be strategically prudent to get to a higher exchange where we can get Institutional support for the stock.. which will probably help the company and shareholders in the long run.