over on ragingbull, it seems that all the talk has been about a possible reverse split. again, i'm a fledgling investor learning about the market. anyways...
doesn't a reverse split occur so that the low price of the stock does not scare off prospective investors? isn't it because higher priced stocks are perceived to be less volatile that a reverse split would be possibly advantageous for a company? the price per share is now at 40 cents. with news of a merger with antik, should not the price move into a stratum that would naturally appeal to many investors, which, therefore, would nullify the worthiness of a reverse split? surely, all the parties (mjet, antik, keating) are anticipating a reasonable increase in the price per share if the merger goes through, right?
another reason for a reverse split would be that dilution has increased the outstanding share count to a figure too high, right? if mjet/antik dilute the share count, to whom would the diluted shares go? would an investor relations firm be a possible recipient of these diluted shares? and would the said investor relations firm receive so many shares as to warrant a reverse split anyway?
again, my questions may be too simple. i don't know. it just seems that at the current share count there is no need for a reverse split. and isn't talking about a reverse split putting the cart before the horse?
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