Sangoma Technologies Corp T.STC

RE:RE:RE:RE:NASDAQ Requirements

[AlwaysLong683]

masfortuna wrote: Well...Not to say that this will be the case, but the few companies that I have had the "pleasure" of being involved with during a share consolidation dropped.  Mathematically, the value should not change ( less shares vs higher price), but psychologically it appears it does. So not sure what I want to do here.  I guess I will wait for further details.
***FYI it will be a minimum of 1:3 (which is dangeroulsy close to the threshhold requirement) and a maximum of 1:5 ( requires 100 million shares also a requirement) 
Mas

Mas, I too have noticed the tendency of the share prices of companies doing a stock consolidation to drop post-consolidation.

Perhaps it depends on what the investment community believes is the reason for the consolidation.....? 

For example, if a company's share price has taken a justified beating and responds by doing a consolidation to escape from say, "penny stock" status, the investment community will likely see through this "strategy" and decide that the company may be doing this because it doesn't see its financial performance or share price improving any time soon, so they used a stock consolidation as a quick way to "dress up" the perception of the company, or in an effort to try and stay on the radar of investment managers who may not invest in stocks with a share price below "x".

In STC's case, it appears they are doing so to meet the requirements to list on an American exchange. A number of STC's competitors are listed on U.S. exchanges (e.g., TWLO, RNG, EGHT), so STC likely wants to play in the same sandbox as the others. Also, with the STS acquisition, STC now has a much bigger presence in the USA, and I think it makes sense for them to try and meet the criteria to list there (hopefully it's the NASDAQ).

With regard to what the stock consolidation ratio will be, in a previous post on this BB, I misunderstood the press release announcing the consolidation.. I originally though that STC was going to choose among a handful of specific ratios (1:2, 1:5, 1:10, etc.), but the chart was for illustrative purposes only and the Board can / will choose whatever ratio they believe is optimal. I hope that they select the lowest possible consolidation ratio they can safely choose, as I believe that a small / micro cap stock with a higher share price may be percieved as "expensive" even if it offers good value based on the entirety of the story and numbers.