Good Morning StuKiwi, You've been throwing up
Post# of 5570
Posted On: 04/24/2014 7:59:11 AM
Good Morning StuKiwi,
You've been throwing up some well thought out posts with excellent opinions of why a R/S would be effective in getting back control of the MPIX share structure along with why such a split should not be viewed as negative. When a company has their ducks in a row, a reverse split isn't always a bad thing. Everyone here for some time has witnessed management reducing the O/S dramatically from the number of shares outstanding when they first took over in late April 2013. They have placed stock thru private placement to raise the necessary capital to keep things rolling, which is obviously what public companies due to execute their business plans. Although the dreaded R/S is typically viewed as a bad thing for shareholders, that's not always the case. If a company has their ducks in a row, it could actually be an important move for shareholders who hold a longer term view as investors.
In the case of MPIX with an O/S approaching 1.3 billion, allow me to offer an example which might make some sense and calm the nerves of those that might fear a reverse. First of all, I'm not suggesting that such a split is imminent. Although if it was, I would welcome it at this juncture. I'll use an example of a 1:20 reverse split with a stock price of .005. A post split share price would result in a stock price of .10. Of course, everyone holding stock into the record date would end up with 1/20 of their original holding. So someone holding 1 million shares at .005 has $5,000 invested at that time. A post split holding would result in a new share count of 50,000 in a stock trading at .10, or $5,000. There's no difference in one's account balance. With a share price at .10 it would take care of the .01 requirement to stay listed on the QB. Additionally, it would also facilitate the raising of capital as an institutional type investor would more apt to inject capital into MPIX trading at .10 with a share structure of just 65 mil rather than into a stock trading at .005 with over 1 billion shares outstanding. Placing 1 mil shares at .10 equals $100,000. That's the same as when the company currently places 20 million shares at .005. Obviously, both instances are dilutive but one needs to view it as a business decision with the overall mindset of what might be best for business execution and growth. Our management team hasn't been one placing stock for any other reasons than keeping the bills paid and building the company which will hopefully result in future value for its shareholders. Since they haven't diluted the crap out of the stock as so many other OTC companies due, I'm not in the camp that our management team would begin dramatically increasing the share count after a reverse split.
Again, I have no idea whether a R/S is currently on the table or not. If I were in management, though, it would certainly be. But since the topic came up over the last few days, I thought I'd throw in my opinion that it's not necessarily a bad thing when a company is ready to begin delivering. Under the current circumstances, I would embrace the lower share structure as it would certainly solve the issue of the minimum requirement of trading at .01 to stay listed on the QB. And since a very large amount of the current OS is held by a relatively small amount of shareholders, I don't believe many of them would exit the stock as they've been here waiting for Victor and Saul to execute which really appears to be finally underway if one reviews just the last two weeks of releases.
Thanks for your time. Take Care!
You've been throwing up some well thought out posts with excellent opinions of why a R/S would be effective in getting back control of the MPIX share structure along with why such a split should not be viewed as negative. When a company has their ducks in a row, a reverse split isn't always a bad thing. Everyone here for some time has witnessed management reducing the O/S dramatically from the number of shares outstanding when they first took over in late April 2013. They have placed stock thru private placement to raise the necessary capital to keep things rolling, which is obviously what public companies due to execute their business plans. Although the dreaded R/S is typically viewed as a bad thing for shareholders, that's not always the case. If a company has their ducks in a row, it could actually be an important move for shareholders who hold a longer term view as investors.
In the case of MPIX with an O/S approaching 1.3 billion, allow me to offer an example which might make some sense and calm the nerves of those that might fear a reverse. First of all, I'm not suggesting that such a split is imminent. Although if it was, I would welcome it at this juncture. I'll use an example of a 1:20 reverse split with a stock price of .005. A post split share price would result in a stock price of .10. Of course, everyone holding stock into the record date would end up with 1/20 of their original holding. So someone holding 1 million shares at .005 has $5,000 invested at that time. A post split holding would result in a new share count of 50,000 in a stock trading at .10, or $5,000. There's no difference in one's account balance. With a share price at .10 it would take care of the .01 requirement to stay listed on the QB. Additionally, it would also facilitate the raising of capital as an institutional type investor would more apt to inject capital into MPIX trading at .10 with a share structure of just 65 mil rather than into a stock trading at .005 with over 1 billion shares outstanding. Placing 1 mil shares at .10 equals $100,000. That's the same as when the company currently places 20 million shares at .005. Obviously, both instances are dilutive but one needs to view it as a business decision with the overall mindset of what might be best for business execution and growth. Our management team hasn't been one placing stock for any other reasons than keeping the bills paid and building the company which will hopefully result in future value for its shareholders. Since they haven't diluted the crap out of the stock as so many other OTC companies due, I'm not in the camp that our management team would begin dramatically increasing the share count after a reverse split.
Again, I have no idea whether a R/S is currently on the table or not. If I were in management, though, it would certainly be. But since the topic came up over the last few days, I thought I'd throw in my opinion that it's not necessarily a bad thing when a company is ready to begin delivering. Under the current circumstances, I would embrace the lower share structure as it would certainly solve the issue of the minimum requirement of trading at .01 to stay listed on the QB. And since a very large amount of the current OS is held by a relatively small amount of shareholders, I don't believe many of them would exit the stock as they've been here waiting for Victor and Saul to execute which really appears to be finally underway if one reviews just the last two weeks of releases.
Thanks for your time. Take Care!
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