RE: RE: RE: RE: RE: The best thing that could happ Reverse Split – A Good Thing?
Shares Outstanding
155.340,000
Market Cap
$8,540,000
Current Share Price
$.055
10 for 1 Split (warrants & options adjust accordingly)
Shares Outstanding - 15,534,000 (155,340,000 / 10)
Market Cap - $8,540,000
Share Price - $.55 ($.055 x 10)
Reverse splits usually take place for 1 of 2 reasons.
1 - To raise share price above ‘penny stock’ status, (stock shares below $5.00 per share are considered penny stocks). The reason being, most institutions do not trade and/or invest in penny stocks.
2 – To reduce share count and raise share price in and with the hope of attracting new investors – And making it possible to offer fewer shares as warrants to prospective investors and/or sell shares for the purpose of financing Company operations – Company has suspended all operations at Nuevo Milenio.
For CMA, #2 applies.
The possible downside is further share price drop, (after reverse split) thus making investors loss greater, at a faster pace.
Keep in mind, CMA share price reflects lack of faith by investors – Share price may also, in part, reflect actions of/by jerks to reduce CMA market cap – Share price may continue to drop until drilling resumes and a positive report comes in. Let’s look at an example of what may occur with share price decline.
Pre-reverse Split
100,000 shares x $.055 = $5,500.00 – Just for this summary, let’s say your buy costs are $.20 a share, ($20,000.00 investment)
Post-reverse Split (10 to 1)
10,000 shares x $.55 = $5,500.00
In one month Share price has dropped from $.11 to $.055; that’s a 50% loss in value. Could this happen after reverse split?
Will CMA have good news, in the month following reverse split, to catapult share price upward?
What happens to post-reverse split investment if share price drops 50%?
Will major shareholders agree to reverse split?
Post-reverse Split (10 to 1)
10,000 shares x $.275 = $2,750.00
Food for thought…………….