YES. That is the question. What will the shares trade at after RS? If you use linear math with no other value included, you'd go from current .0001 to .005 if the rs is 50:1, .003 if it is 30:1, .002 if it is 20:1 and finally .001 if it is 10:1. Now if you factor in value of the companies new assets and income potential,who knows? All those numbers could be multiplied by many multiples higher. Let's say they bring in a $30mm asset with no other debt on the balance sheet, you would take $30mm divided by 5B = .006 or 60x current value of .0001. Let's say they did a 20:1 rs but added $30mm asset. .0001 would go to be reversed to .002, but the value would now be 60x greater due to the asset value. That would vault the share price per share to .12 cents a share.
Summary: If they reverse at 20:1 and add $30mm asset, here's what (possibly) could happen to your holdings before any dilution occurs:
1. If you presently own 100,000 shares valued at .0001 or $10, they will be reduced to 5,000. 2. You multiply your newly reduced shares by the new post RS price of .12 cents per share; 5,000 x .12 = $600
Moral to the story, there will be a large increase in share price initially, followed by sell-off and then new buyers. The key is timing. If you are fast, you could make a bundle right after RS. If you're not fast, you will have to wait for the dip and then buy in on the next run-up. The question is: where does it stabalize and will you play it right when it happens? Also, there could be dilution, but that all depends on how much of the new shares held by PwC are restricted.
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