I Agree with you 100% hotmeat Re: wallstre

I Agree with you 100%

hotmeat

Re: wallstreet1231 post# 83309

Monday, June 16, 2025 12:50:10 AM

Post#
83310
of 83310
WRONG!!!

My contention is that due to a lack of value presented by SunP, the Market lost confidence in the stock and that resulted in the fall in PPS., not the RS.

Had the company done differently we likely wouldnt be in this position this making your claim absurd.

An RS doesnt cause a drop in PPS but a lack of confidence in a company surely does.

Quote:

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A reverse stock split doesn't inherently cause the price per share (PPS) to go lower; in fact, it typically increases the PPS immediately after the split. This is because a reverse split reduces the number of outstanding shares while proportionally increasing the price per share to maintain the same overall market capitalization. For example, in a 1-for-10 reverse split, 10 shares priced at $1 each become 1 share priced at $10.

However, the PPS movement after the reverse split depends on market perception and the company's financial health:
If the company is doing well financially: A reverse split might be viewed positively if it's done to meet exchange listing requirements (e.g., NASDAQ's minimum bid price) or to attract institutional investors who avoid low-priced stocks. In this case, the PPS could stabilize or even rise post-split due to improved market confidence.

If the company is struggling: Reverse splits are often associated with financially distressed companies trying to avoid delisting. If the underlying business isn't sound, the PPS may decline after the split as investors sell off shares, reflecting skepticism about the company's future.

Data from studies, like one by the Journal of Financial Economics (2016), shows that reverse splits often lead to negative long-term stock performance, with 60% of reverse-split stocks underperforming the market over three years. However, this isn't universal—strong companies can buck the trend.
In short, a reverse split doesn't always lower PPS, especially for financially healthy companies, but market sentiment and fundamentals play a big role in post-split performance.

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icymi


$SNPW lets rolll

Everything i post are my opinions only. DYODD