There are 2 kinds of r/s. Their causes and results are so different that I think there should be a different name for the two-so I tried calling the uplisting type a reduction in shares for lack of a better descriptive.
Because in pennyland the two different kinds just causes confusion- several of us have tried to differentiate between the 2 different kinds of r/s to bring the difference to pennytraders consciousness in last year (see posts by balahi, sunny, tlc2, jsnides? rrr1? rocket,max? etc),
r/s to UPLIST is quite different than r/s penny traders are familiar with-a r/s which almost always results from pps falling to .0001 due to lack of fundamentals-chiefly no net income.
Since in that kind of r/s there is no income pps continues falling for same reasons why it was before and co's without net income have to dilute so such companies usually use r/s so they can dilute, for they cant raise much money at a pps of .0001.
As soon as CWRN obtained financing etmm began what many called an unprecedented downward manipulation of cwrn pps -w pps falling to .0002 in fall of 2010.
IN THAT CONTEXT-before CWRN had income-(and maybe even after-but in same context) when the pennytrader type of r/s was a real spectre, Bob said there would be no r/s. Bob was referring to the pennyland type of r/s.
To uplist to OTCQB tier of OTCBB no r/s would be necessary because the OTCQB has no min pps. TO uplist to OTCQX-the other (higher) tier of OTCBB (Walmart of Mexico and Adidas and many foreign blue chips are on the OTCQX) a min pps of 10 cents is required- so if market forces dont raise pps at time a co uplists to OTCQX they have to do a r/s.
So 1 way to avoid that is to buy back and retire shares as mentioned by Nov 2010 PR and 2-28-11 or later PR to help raise pps (which if you read the dd posted by balahi re buyback is aparently oddly not an officially supported reason for buyback in the twilight zone-so its tricky writing to satisfy multiple diverse groups)-
DONT SHOOT THE MESSENGER. I've done so much lobbying on behalf of stockholders re financials, broker restrictions and uplisting etc that I think I may be in the doghouse and may have to eat bingos (the dogs) scraps (a joke he has to say- for there are always people who will not get it, for I have never been compensated 1 cent).
CWRN has not diluted since 2010 (Nov 17 2011 PR) and doesnt need to since CWRN has substantial net income-so there will NEVER be a need for the pennytrader spectre type of r/s-that was the context-Bob wasnt foreclosing a r/s re uplisting to Nasdaq or even OTCQX-because that was NOT the subject of the conversation.
I hope that this post doesnt insult you in any way -I dont know how to explain without telling the truth-doing anything else would only compound the confusion so prevalent in the penny ranks re these things -a confusion carefully cultivated by the potboilers-shorters/bashers/shout fires.
When a co UPLISTS-as long as it has NET income, there is considerable UPWARD pressure on pps resulting from a much larger pool of investors and other advantages which I used to post about frequently when that was an issue-so in that context a r/s is a positive-that is the total opposite of a .0001 no net income pennyland type of r/s.
CWRN has to UPLIST for several reasons,including: 1) pinks are systematically being destroyed by otc/dtc/shorters/brokers/mm's/antibusiness politics etc-Bob is aware of this, 2) and penny stocks do not reward companies w substantial income like OTCBB and especially the higher exchanges do.
CWRN did talk about eventual Nasdaq uplisting in Nov 2010 PR-something made far more attainable by the recent change in minimum Nasdaq standards. There is nothing negative for present stockholders re an eventual uplisting to Nasdaq as far as I can see but it would require an UPLISTING type of r/s if done within the next 2 years-but that would be a good thing.
Taco, I believe you know many of these things but I elucidate for the benefit of those who dont. Sunny, why dont you and others who weigh in on this issue on other board before weigh in again to help describe the difference between the 2 types of r/s. If I get any more sensitive in replying I'll have to go into politics or the diplomatic service and learn double speak-which is to say nothing while attempting to please everybody.
