REVERSE SPLITS SUCK! PHOOEY... I'm Mad as Hell......and I'm not Going to Take it Anymore!!!!!!!!
If you trade the pennies enough, the dreaded "RS" will surely eventually rob you. Rarely are reverse splits successful, and many publicly owned companies are using them as a way to create no-fault/no-pay financing at the expense of unsuspecting investors. Sometimes there are clear signs that a split is possible or likely. Sometimes signs can be more difficult to read.
I was recently involved in a Reverse that took me and many others by surprise while taking us to the bank with a 70:1 RS. The immediate result of this split slashed the stock price by nearly 50% before the new symbol had even traded. The real surprise with this stock, was the news releases about acquisitions, financing and the company' hard line approach to dealing with "shorters" and illegal offshore debentures that simply didn't legally exist. In one well written news release about an exciting name change and possible merger, the CEO explained that the name change was necessary to force the illegal shorters to cover. In the same release, the company announced it's first ever dividend to shareholders in the form of stock warrants in the new symbol as a token of loyalty and good faith. (The hook!) The release also included a request from the CEO for stockholders to call for and hold the stock in certificate form to force the shorts to cover. This was the first sign that should have told us that we were just lambs being lead to the slaughter. The fact that the price could not be moved upward regardless of how many shares were bought should have been another sign. Of course we were all convinced of the illegal short position and everyone bought shares as fast as the company could unload them. The jury is still out as to whether this stock will rebound or continue to crash and burn. The percentages greatly favor the latter.
So let's discuss in this forum, ways to spot the signs of the reverse split so that maybe we can all learn to identify some of the warnings. Tell us about a split you have been involved in or just vent some anger about being robbed by this legal form of theft. This thread is open to all. Please share anything you may have.
S~ |
