RE:RE:RE:RE:RE:Consolidation happyInvestor1 wrote:
i think people are freaking out for no reason. a reverse split will only lower the amount of shares you have and increase the value. ex: you have 1000 shares, the value is curently $400, then it will become 31 shares at $13.20 each.
Globally, the 151.64M actual shares will become 4.6M shares. But then, you'll need to add the new shares issued. From the news release, 29.3M new shares will be added from new subscriptions. You have to also add to that the shares received by the current term loan, eurobond, debentures and pref shares holders.
So, while the commons are being rolled back to 4.6M shares, the newco will have closer to 45M shares, of which 29.3M will have been newly issued at 3.412 (about 65%). Anyone who bought shares to hold them through the date required to purchase new shares, then sold them after that date, will make a large capital gain if the initial price is $13.20 on conversion. Even if "only" 10% of the new shares get sold for a profit (on conversion), that will likely drive the initial price lower.