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Posted On: 02/05/2021 7:39:53 AM
Post# of 22465
What so many people over look is sustained revenue when calculating reverse split impact.
If a reverse split occurs without sustained revenues, the value of the company stays the same or goes down depending on investor sentiment.
The market value doesn’t change of a reverse split unless the share price slides down or goes up.
Therefore at the time of the reverse split, we all have the same value for the stock we own, whether it’s 1 share or 10 shares, the dollar amount is equal.
From what I’ve seen, most reverse splits mentioned by investors posting on this onboard are referring to OTC listed company’s.
A reverse split with sustained revenues or increasing revenues would end up with share price rising and subsequently our investment dollars rising. We would have more money after the split, but less shares.
Set the reverse split aside and consider the liquidity addition that up-listing to the NASDAQ provides: more brokerages trading, institutional investors, mutual funds, etc. The up-list increases the pool of investors drastically and gives more visibility to news and company progress. Up-listing also provides higher SEC regulatory oversight for the company and the market makers. Up-listing in and of itself is a really good thing.
Adding these together: Increased revenues, reverse split, and up-list to NASDAQ, we have a formula for increased value for all shareholders.
If a reverse split occurs without sustained revenues, the value of the company stays the same or goes down depending on investor sentiment.
The market value doesn’t change of a reverse split unless the share price slides down or goes up.
Therefore at the time of the reverse split, we all have the same value for the stock we own, whether it’s 1 share or 10 shares, the dollar amount is equal.
From what I’ve seen, most reverse splits mentioned by investors posting on this onboard are referring to OTC listed company’s.
A reverse split with sustained revenues or increasing revenues would end up with share price rising and subsequently our investment dollars rising. We would have more money after the split, but less shares.
Set the reverse split aside and consider the liquidity addition that up-listing to the NASDAQ provides: more brokerages trading, institutional investors, mutual funds, etc. The up-list increases the pool of investors drastically and gives more visibility to news and company progress. Up-listing also provides higher SEC regulatory oversight for the company and the market makers. Up-listing in and of itself is a really good thing.
Adding these together: Increased revenues, reverse split, and up-list to NASDAQ, we have a formula for increased value for all shareholders.
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