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Posted On: 02/25/2018 6:03:06 PM
Post# of 4081
Here's some more in depth explanation into Reverse Splits and what purposes they can be used for in legitimate companies:
A good example of this is Duke energy. In 2012, Duke Energy wanted to merge with Progress Energy, but their OS was too large to provide Progress with an amount of shares in exchange that would represent a reasonable market value for what Progress would add to the company once merged. Therefore, they did a 3:1 RS in order to make room in the OS that they could then issue shares for the purpose of the acquisition. This move increased the Market Cap of the company and in the end was a benefit to shareholders.
A good example of this is Duke energy. In 2012, Duke Energy wanted to merge with Progress Energy, but their OS was too large to provide Progress with an amount of shares in exchange that would represent a reasonable market value for what Progress would add to the company once merged. Therefore, they did a 3:1 RS in order to make room in the OS that they could then issue shares for the purpose of the acquisition. This move increased the Market Cap of the company and in the end was a benefit to shareholders.
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