What this is about is that most investors don't wa
Post# of 96892
Posted On: 05/11/2016 11:54:54 AM
Re: Krisandtilly #59032
What this is about is that most investors don't want to buy stock in companies that have an AS in the billions. This is one reason for a reverse split. A 2 billion AS looks bad. It looks like a company that has diluted their stock. So what do these companies do that have diluted their stock? They do a reverse split. It is only a math equation that is designed to make things LOOK BETTER.
The other reason to do a reverse split is so that the pps moves up proportionally to a level that is acceptable to a higher stock board. To do this it would mean audited fins are required also.
This is why a reverse split can be a good thing and it can be a bad thing. To move to a higher board they don't want to see a balance sheet with a 2 billion AS and a pps in the fractions of a cent.
The other reason to do a reverse split is so that the pps moves up proportionally to a level that is acceptable to a higher stock board. To do this it would mean audited fins are required also.
This is why a reverse split can be a good thing and it can be a bad thing. To move to a higher board they don't want to see a balance sheet with a 2 billion AS and a pps in the fractions of a cent.
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