Replies to post #4459 on Cosmos Holdings Inc (COSM)

[Monksdream]

I got into a habit of keeping up with companies effecting reverse splits since the summer. Most are NASDAQ listed. The frequency has reached at least one per trading session. There are 250 trading sessions in a 12 month period. At one reverse split per day traders will have the opportunity to participate in at least one reverse split play in the next 12 months.
These small money losing third tier NASDAQ companies can only remain in business by selling more shares. In order to accomplish this the best alternative is to effect a reverse split and then sell more shares at the higher price.
We know that a reverse split creates a temporary condition of a low trading float. The scarcity of available shares creates a temporary rise in price, sometimes dramatically so. Eventually the company will announce its intention to sell more shares and then, over the course of time and space, the share price will adjust downward.