Replies to post #203566 on Spongetech Delivery Systems, Inc. (fka SPNGQ)

[big lug]

Now on the R/S... I hear a lot of people saying that they don't like it because typically the stock price goes down after the R/S. Now the question needs to be asked why that happens and why does a company typically execute a reverse split.

If ABC company's share price is headed south and the PPS is getting to the point where ABC will be delisted, they may execute a reverse split in an attempt to prop up their falling share price to avoid being delisted.

Now after the R/S ABC company's share price continues to go south. If the underlying root cause of their declining share price has not changed then that is exactly what I would expect to happen.

Simply put... The R/S is not the cause of the declining share price.

I don't see sponge fitting the "ABC" company scenario, therefor I see no reason for a long term decline. Short term maybe yes because of certain mindsets. But in the long run if the company continues to increase their value, and we assume an elimination of shares price manipulation, then it will eventually be reflected in the share price.

Big Lug