Replies to post #957 on Novamex Energy Inc. (fka NGLE)

[scorpio71]

divide by 5 the number of shares you have and that's what you will have after the split.... So if you purchased 100,000 shares today, after the split you will have 20,000 - however the share price will be 5 times higher.

communication with IR at RioGrande (BLUG) indicates that they are just waiting on FINRA to push along the paperwork and initiate the reverse split and corresponding pricing change. They are still expecting this to take place this week.

You must take into careful consideration what is about to happen here, as it's not the usual scenario. The reverse split will affect not just the outstanding shares, but the authorized shares as well, the entire share structure will be reduced resulting in a much more favorable structure for a possible uplisting (speculated) and more eyes for better exposure in the investment community. If they follow up the reverse split with important financing news, you will see rapid price appreciation. The float here will be tiny after the split. If you go to their website, http://www.riograndepetroleum.com/ you can read the Independent Research Report and see the potential revenue figures. Basically anywhere from $700M to $1B in potential here, and an A/S of only 100 million should give everybody an idea of where this might head to.

[levitateme]

yes, technically, but this share reduction also includes a reduction in a/s (authorized shares) as well as the o/s (outstanding shares), so their reasoning for doing this is obviously not to dilute shares (the reason many pink/otc stocks do this and also the reason there are sometimes big selloffs). we have not seen alot of selling since BLUG announced this (most companies don't pre-announce it btw, they do it and investors end up finding out later), in fact there has been quite a bit of buying, and BLUG has held it's value during the peaks and valleys of normal trading.

the reasons i believe BLUG is reducing it's share structure is for the stock to be able to move into the big time and more easily uplist to a higher exchange to attract more of an institutional investor base.

As per company PR on 3/22:

As we noted earlier, we believe this to be in the best interest of the company’s stockholders, and consistent with our long-term plans of moving the Company to a point of higher visibility with the investment community

to qualify for nasdaq one of the requirements i believe is that the stock has to regularly trade over a dollar, and i believe that may be where BLUG will be heading, or to some similar higher exchange. on any solid news, with a 1/5 reduced share structure, this stock could fly high on a breeze, and should be able to reach up into dollar territory easily. shares of BLUG would become much harder to get, basic supply and demand. of course you will have 1/5 as many shares, but here's a scenario: let's say the day of the share reduction this is at .02. pps automatically goes up to .10 due to the reduction. let's say you had $4,000 worth that's 200,000 shares that's now 40,000 shares and still $4,000 worth. let's say that right after the reduction or soon afterward the company releases some great news that creates an increased demand for the stock and now because of the reduced amount of shares, instead of moving just a few cents, the stock now moves on air up into dollar + territory. now your investment is in ten + bagger territory. at a pps of $1 + = your 40,000 shares are now worth $40,000 +. this is what i could see easily happening here, and i would think is along the lines of what the company also may have in mind. it is keeping in line with the past few company PR's.

why wouldn't i sell now and buy back after the share reduction? because imo shares will be much harder to get after the share reduction, there will be much less of them available. and i also suspect the company will be releasing major news during or soon after the reduction, which would cause pre-reduction shares to become more valuable right out of the post-reduction gate.

BLUG is all set up to do some drilling in the famous permian basin alongside some big companies that already trade on higher exchanges.

all imo glta

GO BLUG