A real life reverse split and what it could really mean to us in this instance. Not precise numbers but a fair example. I own GE. I am pretty sure most of you know that the stock has traded at a loss for well over a year. I owned 450 shares. I was down ABOUT $3,500 at about $8.00 a share. They did a reverse split. I now own 53 shares at a whopping $104.00. Even at that evaluation, now owning only 53 shares I am screwed. I am still in the hole for $3,500. How do I make up a $3,500 loss owning 53 shares. GE would have to go to several hundred dollars a shares for me to be even. IMPOSSIBLE! So, what will I do? At the end of the year at tax time I will have to sell GE and take the loss and the tax credit. I can see no choice. I will reinvest what is left in another company. Now, QMC. It stopped trading at .04. I own well over a million shares. Their reverse split will have to be some obscene number to get the valuation high enough to get to a higher exchange, leaving all of use with a gigantic loss that cannot be recouped. Thankfully, the SEC rules require a company to show cause as to why they want to do a reverse split. LOTS OF CAUSE! You just can't do it without having a significant amount of income. The SEC doesn't allow a company to fool people. It has to show good reasons for a reverse split. Don't be fooled. AGAIN
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