metropick, I think many of us are already assuming that the company diluted. However, I think that the company screwed up and let the price go WAY below fair value.
Say I liked the company and had an order in last week to buy at .90 (when it was trading at .92 pre-split). Ans say that I wasn't the only one. After the split, the "true bid" should have been .90*250, or $225. But because of the split and new symbol, my order, along with EVERYONE else's, was gone. So when the company dumped shares (assuming they did), Market Makers were the only ones willing to buy them . And if the company put in a market order, the MMs decided that they would take them at a 99%+ discount.
Since MMs were the only ones buying, I would think they would be looking to sell higher in the near future.
I just think it's as simple as the company screwing up and selling at a huge discount without realizing that there was not yet a market for the split adjusted shares.
I think this should rebound to a much more reasonable price, because even if every single share traded post-split came from the company, that puts the float at like 150,000 and O/S at 250,000. For a company with $13 million in assets, that equates to a $52 share price with no multiple. Unless the company keeps selling shares, I see no reason this shouldn't rebound to something significantly higher than the $2-$3 we saw last week.
All IMO of course, but it seems to be the only thing that makes sense to me.
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