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Undercooked Falafel

03/23/10 2:46 PM

#24371 RE: wobblenuts #24370

That's NIR's mantra.

Sloth97

03/23/10 3:19 PM

#24373 RE: wobblenuts #24370

wobblenuts, no it's totally different. It could I suppose but both are completely independent of one another. Companies get bad advice to do reverse splits from Investor relation groups often times. They believe that increasing the pps and reducing the OS/AS will entice investors. That's the complete opposite of what happens and any investing book will tell you the same. The price plummets back down to the previous level, the company dilutes the stock back up to previous levels and shareholders are left with a fraction of the shares they previously owned. It does absolutely nothing positive in almost all scenarios. It can be viewed as positive if it's to prop up the pps to uplist to the a higher exchange that has a minimum stock price for listing (ie. AMEX and Nasdaq). That only works if the company is strong fundamentally before doing it (income statement/balance sheet wise).

Cyberlux completely controls any decision to split and I would imagine they know better than to do one since they just raised the AS to 20 billion. You can overcome dilution much easier than the double whammy of dilution and a reverse split. Adding an additional negative doesn't make it positive.