Having had a chance to reflect some more about the
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Posted On: 03/23/2019 5:45:47 PM
Having had a chance to reflect some more about the reverse split, here are some of the reasons I'm not shaking all the sleeping pills out of the bottle.
1. Timing is everything. I believe management chose this moment because they are addressing old issues and getting their ducks lined up for when the revenue starts flowing in. (See: Tsunami.) At a 20:1 split, we will have 100M shares outstanding instead of two billion. That is a HUGE difference and it is all quite painless if you leave aside investor freakouts (about which more below). It addresses perhaps the most fundamental longstanding issue in the stock, the cap structure.
2. Reverse splits have a bad reputation because they're often used by dubious people for dubious reasons. (Keep stringing along the suckers.) That is not the case here. I think we need to separate between unsavory reverse splits and [sensible/i] ones, which is the case here.
3. I don't care how many shares I have, so long as a) I have sufficient liquidity in terms of my share count, and b) my value isn't decreased (which it isn't here).
4) Management didn't tell us in advance because (in my less than 100% certain legal opinion) it was legally barred from telling us. This is material information; there are SEC rules to follow. I suspect they operated as a constraint here.
I'm invested and not going anywhere. I choose to believe in this company and its management. There are many lenses through which to see this stock split I choose to see it as sane, sound and strategic. In the context of all the positive things that are happening (see Kovnick's email, which I posted earlier), I choose to see this as positive, too. I'm betting that here, too, management knows what it's doing.
1. Timing is everything. I believe management chose this moment because they are addressing old issues and getting their ducks lined up for when the revenue starts flowing in. (See: Tsunami.) At a 20:1 split, we will have 100M shares outstanding instead of two billion. That is a HUGE difference and it is all quite painless if you leave aside investor freakouts (about which more below). It addresses perhaps the most fundamental longstanding issue in the stock, the cap structure.
2. Reverse splits have a bad reputation because they're often used by dubious people for dubious reasons. (Keep stringing along the suckers.) That is not the case here. I think we need to separate between unsavory reverse splits and [sensible/i] ones, which is the case here.
3. I don't care how many shares I have, so long as a) I have sufficient liquidity in terms of my share count, and b) my value isn't decreased (which it isn't here).
4) Management didn't tell us in advance because (in my less than 100% certain legal opinion) it was legally barred from telling us. This is material information; there are SEC rules to follow. I suspect they operated as a constraint here.
I'm invested and not going anywhere. I choose to believe in this company and its management. There are many lenses through which to see this stock split I choose to see it as sane, sound and strategic. In the context of all the positive things that are happening (see Kovnick's email, which I posted earlier), I choose to see this as positive, too. I'm betting that here, too, management knows what it's doing.
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(1)Rocky Mountain High Brands, Inc. (RMHB) Stock Research Links
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