Gensource Potash Corp V.GSP

Share Consolidations

[bobbythebaker]

Share consolidations have zero effect - - nothing - - nada - - zip to the market value or potential dilution of a stock.

 

A company with 400mm shares at $0.15 is the exact same company, with the exact same market cap ($60mm), as one with 40mm shares at $1.50

 

And any dilution amount is the same for any $60mm company.

 

The only thing share consolidations change are the share price, which can:

-> Give better optics
-> Keep a company from being a penny stock which some firms / investors are not allowed to touch
-> Can help companies meet exchange listing requirements for minimum share price.

I don't deny that many worthless companies have performed repeated share consolidations that keep the share price looking decent while the underlying company is destroying shareholder value. 

But a share consolidation in and of itself has no effect on the company's value or dilution potential.

[stockwatcher248]

totally agree with you BTB.... the reason share consolidations have such a negative image is that 90% of share consolidations will usually back off in the near term once trading post consolidation....certainly has been my experience....

[mdjbrown]

Mostly agree btb, and in a weird way it could be the best strategy going forward, but that is largely contingent on Gsp holding up their end of the equation, as any lull or delay in mine construction momentum could send the shareprice south. The only issue from a shareholders perspective is often capitalizing on gains as it is far more likely a shareprice of .15 cents hits .30 cents in the blink

[stockwatcher248]

as the company has not stated anything about a share consolidation we should maybe quit posting about consolidations as it is probably scaring readers and triggerring selling

[mdjbrown]

sw248, it is unlikely anything posted on Stockhouse has much influence on a shareprice with the exception of maybe a few retail investors. If anything tax loss selling perhaps has mildly crept in, but the shareprice has held up really well on low volume this past month. Simply put, those who believe in this exciting story are holding, and those who dont, are likely watching from the sidelines

[black364]

as the company has not stated anything about a share consolidation we should maybe quit posting about consolidations as it is probably scaring readers and triggerring selling Stock, find above your Dec 20 post.  Please allow me to make a slight correction.  You very well may have insulted other posters on this board. There is no "WE" in this.  Your post would be better

[stockwatcher248]

MJB and BTB were also commenting on it so we was more appropriate......go back and take your grade 7 english class, you need it

[black364]

Sorry Stock, Bobby wasn't commenting on consolidation in a negative way that you consistently do.  Do not attempt to incorporate others in your slams. I went back and read your multiple posts on this subject, I can post them all if you wish.  As for Brown, he's spent years bashing Gensource, we know all of his negative posts also exist and are accessible.  Come January