OTCQX:MRVFF - Post by User
Post by
HippygirL74on Apr 13, 2010 11:11pm
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Post# 16988626
Changed my mind - YES
Changed my mind - YESPreviously my first reaction was NO to a stock consolidation, but now, i am in the YES camp.
If the consolidation is for the purpose of a NASDAQ listing, then i don't think the market will mind at all. The reason for a NASDAQ listing is to access capital, so yes, there will be more dilution in the future.
BUT, the dilution is not necessarily a bad thing if the purpose of the dilution is accretive to earnings. In addition the quality of institutional investors is better when the price is higher and on a more respected exchange. But on the NASDAQ, the sp should be at least $10 per share.
For those who think a share buyback should happen, it won't. i wouldn't support that. $40 MM in cash is not a lot of money. And when cash levels drop below a certain amount, more financings will have to be done just to stay afloat, and this is a dangerous kind of dilution, not the accretive type of dilution.
imo, just hang tight because this company is not closing anytime soon.
And here is one example of a reverse split that worked following the merger of two companies, AT&T and Comcast - done in 2002.