Higher Share Price attracts more institutional investorsAs many institutional investors can only invest in stocks above a certain price, a reverse split could prove be beneficial for Eldorado vs delisting. This option will mostly attract longer term growth investors and keep the shorters away who give the value and reputation of a company a bad rap. The reverse split could cause an adjustment period in the prive and value of a share but in the long term will probably prove to embolden and re-inforce the reputation and strong work/management ethic of Eldorado, and in term be much more valuable(nice dividend possibility, and re-inforced higher value price) to the shareholders.
Let's not forget that Eldorado is probably one of the best managed Gold mining companies that exists today yet it has been faces with bad external luck that has caused this downward spiral of the shareprice. It's amazing that Eldorado has kept a positive and brave attitude in spite of this insane storm and is a mark of a very strong company that is still young and has so much growth potential ahead over the very long term.
Had it not been for bad luck and mistreatment Eldorado would easily be at 7-8 dollars on the TSX today. Once Eldorado pays it debts in a few years and has all it operations running at steady and efficient levels hopefully withing the next 2-3 years than a +10 dollar share price is very likely once investor confidence is restored even if the value of gold decreases as Eldorado has very low cost per ounce.
I would speculate however that Gold prices are going to have a breakout in the next few years to new all time highs as inflation with many fiat currencies is gradually starting to reveal itself.
All things considered I wouldnt be surprised even 1 year after a reverse split comes into effect that a forward stock split is implemented at a 2:1 ratio at a conservative estimate in the 6-8.5 dollar range on the tsx per share.
For those who want to make fast money this is not the stock for you. However if you believe and understand the value of Gold and can be patient than the reward will be significant!