It depends on the timing. If a company's profit is on the rise and debt is eliminated, the stock will reflect it and follow the valuation upward. If growth is strong enough, they may even buy back shares. Still, the only time you lose is when debt is rampant, the profit never comes and a reverse split is followed by more dilution. Those stocks end up avoided as opposed to sought out by big investors. Anyone who's ever played with pennies should have seen at least a few companies that failed to make it. I don't think we'll see this company fail. They're well on their way to success right now.