American Bonanza Gold Corp ABGFF

Re: Reverse Spits etc.

[goldsoldat]

Well, there is, of course a difference between a consolidation and a reverse split. A consolidation is less toxic than a reverse split as to the share price drop. It is true that IN THEORY, the share price should not drop in response to a reverse split (or consolidation). The problem is that Stass has it exactly right. If not every time, certainly almost every time, the share price in a r/s drops significantly, and remains depressed for a relatively long time. It is also true to a lesser degree for consolidations. Although there are legions of r/s examples, the best consolidation example would be Geomaque which became Defiance and consolidated with Rio Narcia Gold. I am still down 40% from consolidation price on that one. Goldsoldat.