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Chalice Brands Ltd CHALF

Chalice Brands Ltd. is a U.S. operator in the most competitive, innovative and mature cannabis market in North America. Leaders in retail, marketing and craft cultivation supported by fully integrated processing and distribution. The Company has 12 retail stores in Oregon operating as Chalice Farms, Homegrown Oregon and Left Coast Connection and is distributed nationally through Fifth & Root.


GREY:CHALF - Post by User

Post by daveinvestoron Mar 10, 2021 11:57am
433 Views
Post# 32763038

Reverse Splits and it's implications

Reverse Splits and it's implications

please do your own research and draw your own conclusions.


https://www.investopedia.com/ask/answers/071415/why-would-company-perform-reverse-stock-split.asp
 


KEY TAKEAWAYS

  • A company performs a reverse stock split to boost its stock price by decreasing the number of shares outstanding.
  • A reverse stock split has no inherent effect on the company's value, with market capitalization remaining the same after it’s executed.
  • This path is usually pursued to prevent a stock from being delisted or to improve a company's image and visibility.

 
Criticism of a Reverse Stock Split 
Reverse stock splits aren’t without flaws. In many cases, companies keen to artificially boost their share price in this manner risk being spurned by investors.
Reverse stock splits can carry a negative connotation. As previously stated, a company is more likely to undergo a reverse stock split if its share price has fallen so low that it is in danger of being delisted. Consequently, investors might believe the company is struggling and view the reverse split as nothing more than an accounting gimmick.


So, as I understand the situation:

  • They were never going to be delisted and they were not struggling, but they wanted to increase the company’s visibility 
  • They are in fact cash flow positive for the first time. They are actually finally being properly managed
  • They are better poised today with its present management to take advantage of coming legislation than they have ever been.  Should it arrive this will result in a sector boom. 
  • I see this as just another strategic move to set the company up for success. This is no gimmick and time will tell. Held for this long, what's a couple more months?
 
As stated, draw your own conclusions, leave if you don't like it. No one is forcing you to stay. Come back in a year and tell us you told us so, but for god’s sake don't post dozens of times a day against any opinion running counter to your own, that's pathetic. You have had dozens of opportunities to leave, sticking around and complaining shows your true agenda.

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