I was away for the weekend so I'll throw in my 2c.
Post# of 1145
Posted On: 07/14/2014 11:00:18 AM
I was away for the weekend so I'll throw in my 2c... Reverse Splits are 'usually' frowned upon, and rightfully so, 'IF' this is done by a company in distress. Luckily this isn't the case with PTK, quite to the contrary, so I really have to laugh at the ones saying (on other fora) that we'll fall back quickly to pre-split levels. That only happens with junk stocks! So comparing PTK with such companies is really ludicrous and uncalled for!
Actually, there are only four instances I can think of where a RS is favorable; to uplist, to allow institutional players in, to get access to better funding conditions, and to facilitate a merger or other related corporate action. I'll be voting YES, for the following reasons:
- Uplisting to a higher exchange.
- To get the SP above $5 so certain Institutional Investors can buy PTK.
(I think ATIC) They own GlobalFoundries & now their ex CEO joined PTK... hmmm
- The RS could also be done to facilitate a merger. Say company X wants to merge PTK in their business and does that for a 1 for 1 share exchange, then having a reduced Share Structure (SS) is favorable for their shareholders, and ultimately also for us.
- Once revenue flows in a reduced SS will offer higher EPS & be beneficial to calculate other market metrics.
- Think about what will happen when stellar news is released, with the pool of shares decreased after a RS?
The influx of more buyers will cause higher % increases, especially when more deep pocketed investors are allowed to play PTK on the NASDAQ, or whatever exchange.
- I also think that a year or so after the RS we'll see a FS, as the reduced post split float will be gobbled up rather quickly by the same deep pocketed investors.
- Once we trade on a higher exchange there will be more demand and a higher daily average trading volume which will be easier for Warrant holders to sell, with a less detrimental effect on the share price.
As you can see there are plenty advantages to a RS scenario.
I can understand the first panic emotions by those who had bad experiences in the past with shady companies, but given more thought there's not much reason to be concerned when its done to uplist by decent businesses.
Keep in mind tho that it might not be necessary at all to do a RS.
The company only asks for an amendment to its Articles of Incorporation just in case the situation at the time of uplisting calls for a RS, say in a bearish market where the SP has dropped under the minimum Listing threshold. With all the upcoming news over the next 12 months I somehow doubt a RS will be necessary. When it does happen for whatever reason I expect a 2:1 or tops 3:1. A 5:1 split is the absolute maximum, in a worst case scenario and I think that management is fully aware that their own holdings are not excluded from a RS, so they'll do whatever they can to grow to the minimum Listing threshold in an organic way. Build the disruptive POET platform, licenses, revenue & the share price will follow. This RS resolution is a mere stick behind the door IMHO.
Actually, there are only four instances I can think of where a RS is favorable; to uplist, to allow institutional players in, to get access to better funding conditions, and to facilitate a merger or other related corporate action. I'll be voting YES, for the following reasons:
- Uplisting to a higher exchange.
- To get the SP above $5 so certain Institutional Investors can buy PTK.
(I think ATIC) They own GlobalFoundries & now their ex CEO joined PTK... hmmm
- The RS could also be done to facilitate a merger. Say company X wants to merge PTK in their business and does that for a 1 for 1 share exchange, then having a reduced Share Structure (SS) is favorable for their shareholders, and ultimately also for us.
- Once revenue flows in a reduced SS will offer higher EPS & be beneficial to calculate other market metrics.
- Think about what will happen when stellar news is released, with the pool of shares decreased after a RS?
The influx of more buyers will cause higher % increases, especially when more deep pocketed investors are allowed to play PTK on the NASDAQ, or whatever exchange.
- I also think that a year or so after the RS we'll see a FS, as the reduced post split float will be gobbled up rather quickly by the same deep pocketed investors.
- Once we trade on a higher exchange there will be more demand and a higher daily average trading volume which will be easier for Warrant holders to sell, with a less detrimental effect on the share price.
As you can see there are plenty advantages to a RS scenario.
I can understand the first panic emotions by those who had bad experiences in the past with shady companies, but given more thought there's not much reason to be concerned when its done to uplist by decent businesses.
Keep in mind tho that it might not be necessary at all to do a RS.
The company only asks for an amendment to its Articles of Incorporation just in case the situation at the time of uplisting calls for a RS, say in a bearish market where the SP has dropped under the minimum Listing threshold. With all the upcoming news over the next 12 months I somehow doubt a RS will be necessary. When it does happen for whatever reason I expect a 2:1 or tops 3:1. A 5:1 split is the absolute maximum, in a worst case scenario and I think that management is fully aware that their own holdings are not excluded from a RS, so they'll do whatever they can to grow to the minimum Listing threshold in an organic way. Build the disruptive POET platform, licenses, revenue & the share price will follow. This RS resolution is a mere stick behind the door IMHO.
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