Replies to post #71446 on Expo Holdings Inc. (EXPH)

[DD-214]

take this fwiw.. although they don't have a steller track record with other statements/promises..

"The company has no intentions of executing a reverse split of its common stock. Shareholders should expect product placement announcements once material events have occurred.
4/12/2010 3:47:06 PM"

[Santa Barbara Broker]

I'm guessing the lion's share of the stock ferried off to the "private investors" was probably sold as discounted notes (likely 20% give or take) to a strike price on some future date when any sales restrictions (lockout period) on them expires. In other words, those private investors are holding a type of convertible debenture pledging shares at a relative and averaged price to shares selling in and around that future time period. Meaning they could liquidate those shares immediately at that 20% profit just by converting and selling them at their average conversion price the day of lockout expiration. The buyers of these shares aren't morons. They have to have a guarantee far exceeding that of your run of the mill junk bond to take such huge risks and the unspoken "pledge" of "cooperation" (usually) of the issuing body. The corporation wants their common shareholders to believe these "astute businessmen" are coming in and investing in this great cabinetry company to give the common shareholders a false sense of security. Usually the large block investors could care less if an EXPH is manufacturing cabinets or jock straps. They are in it for the quick 20% (or higher) return on their "loan".

A reverse split would simply transpose into that arrangement at whatever split percentage is elected. If a private investor was holding a CD or note worth "X dollars" convertible into common shares at certain averaged price on or around the lockout expiration, they would simply be issued the number of shares equal to "X dollars" at that strike price plus 20% additional shares at that valuation. The R/S wouldn't really affect the investor at all other than perhaps making it quicker and easier to dispose of their converted shares due to them now being less in number and higher in value due to the split. If the PPS was dropping like a rock on that lockout expiration period due to dilution or other factors, THAT is where the "cooperation" factor might play in. In some instances it might be "prudent" for an investor to convert their shares and hold them....should they just maybe have managed to get the idea a very advantageous PR is about to be released that could run the PPS hard in the opposite direction...aka a P&D. All IMHO.

SBB