GREY:ARGEF - Post by User
Post by
billr861on Jun 12, 2019 10:30am
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Post# 29818319
Reverse splits, the good and the bad....
Reverse splits, the good and the bad....The bad side to a reverse split is when a company has no income, the sp is all about perception of value. Do a reverse of 1 for 10 and sp goes from 3.5c up to 35c with no supporting income to validate the increase it becomes over priced to the market and the sp drops after the split. However, if done when the company HAS income, it can definitely improve the 'look' on paper that the co. has. Example....Argex has 5c of profit, sp is $1.00, and share count is 700M. Now do a 1 for 10 split and the numbers become more palatable.....50c profit, sp $10.00 and shares drop to 70M which looks like a much better investment. Under this scenario, the sp is supported and should continue to climb.
Unfortunately, Argex has no income so no profits and we should NOT do a split at this time. Once we have income and profits, THEN would be a great time to do the split.
Vote against the reverse split at this time!