RE:RE:RE:It's a reverse split not a split
ok first the value of what we hold is the same...say you have 2000 shares right now at .10 for a total value of $200 when the consolidation happens on a 2 to 1 you will have half the shares or 1000 but at .20 per share for $200. ,Mathematically and value wise nothing changes. Now you look at what is being said...this is a merger and a acquisition the company is not getting Covid for free so they have to issue shares that is where the 16.5 million shares are coming in and to reconcile this and the value this has happened...that's one part of the equation. Let's round the numbers prior to the consolidation there are roughly 80 million shares without doing anything with the additional shares 17 million that would put the company at 97 million but with it half of 80 is 40 plus the 17 is 57 million shares...strategically the structure is being shifted because there is a very good likelihood that more raises will need to be done and more dilution which without the consolidation would likely happen .10 or less depending where the stock is trading and depending on the need let's say 2 million that would mean 20 million shares at .10 for a total of 117 million shares now if done at.20 that is only 10 million shares for a total of 67 million....now if the company earns let's say 10 million the value of the company is worth more with the fewer shares (or whatever revenue there is)...very smart strategic decision to restructure the share count...goes back to what I said if the company has nothing to offer is otherwise flat or in losses of earnings this would be putting lipstick on a pig and would be a death knell to companies but this is not the case the company is no doubt looking to fill a huge need and make monies and to keep shares down with the foresight of still needing to raise capital moving forward it will likely be done on a higher level. Now for what I will speculate because the price to warrants is quite low and because this looks to me as paying covid owners for the acquisition they will have shares at .08 with an exercisable price at .10 for 5 yrs...by logic and by likely price movement this is not going to be .08 to .10 for the next 5 yrs...there are also certain transactions that are exempt under prospectus where certain amount of shares are given as payment bought and sold etc which dont immediately come into the public market so it is not likely going to have value drag like that and most likely if the value is up that's when those shares may be disposed in the public market I dont fully understand how all that works so i wont entirely speak to this but overall this is a fantastic move and the share value will likely go up and stay up unless the company doesnt make strong revenue or goes flat and keeps diluting...so while people dont typically like consolidation in strategic circumstances with a growing revenue flow through it is better to do on a weak one it is always a move of desperation to make the share value look good and more attractive to potential investors who get duped if they dont see the underlying causes. Many years back because Egusna egt was growing and had lots of outstanding shares I strongly suggested on the boards for the company to consolidate the shares people hated that and thought the value could reach.50 with the amount of revenue to outstanding the best it did was .35 and kept falling and it cant make it past.10 because there are too many shares and while the revenue is increasing it isnt doing enough to offset the more than 226 million currently is and so with it that low value raises further dilution and proportionately not enough revenue to offset the share count hence being stuck at low trading values...because companies always issue shares dilute and consolidate this is where one needs to take either all or some profit monies off the table when it is there you dont know what companies will do but the majority of times for pennies they end up losing so if one knows the trade cycle or buys at the very low but needs to wait and takes profit you will likely do well but if one holds too long thinking the share value is justified and will keep going up buy and hold you will likely get smoked...on top of all this people keep trading the shiate out of companies day trade if not short for a retailer who doesnt do this day trade although they can lose the shirts off their back if not smart and keeps holding you will likely be the proverbial bag holder...I am not here to suggest how anyone looks after their affairs i am just saying this consolidation is the right and smart move from my point of view and i strongly believe we will benefit with the caveat that the company indeed grows its revenue which it should that's why they acquired Covid and the price should likely go up but all I will say is we will have to see where the chip falls again as to my last post it's not easy finding companies entering the ppe market for under .10 and hard to know which ones will pursue the opportunity and by the time we become to know the once cheaply priced companies are trading high...I wouldnt buy when the share jumps because there will be profit taking and then if the companies dont have lots of further news release as always prices slump and if the financial disappoint they take further hits along with everything else for where this is trading risk to reward well worth going after again just my opinion not saying buy or not not qualified to do so...do your own DD...I personally like the price and think it is a smart move to consolidate and have given my reasons for it...again let's see where the chip falls.