Mike, unfortunately, reverse stock splits are popular for companies that are in the business of selling stock, then taking it back, and then selling some more, in a never ending cycle of screwing the stockholders. In other words, the primary business that these type companies are in is selling stock, and all the rest is just a cover. This stock, like all the rest, will take back the stock it sold to you in this so-called reverse split, and then start selling it back to more unsuspecting suckers. A year from now (or less) the stock will still be at 5/8s and you will only own 1/15th of what you bought originally. Just watch if you don't believe me.
One example, CHIP-bb, formally LONE-bb, was hovering around 10 to 20 cents when it announced a reverse split (1 for 25!). Guess what, a few months later, the stock is now at 28 cents, even though CHIP stockholders only have 1 share for every 25 they had before. I still don't know why this is legal, but these companies are scams, selling worthless stock to suckers so they can profit. Just one man's opinion. |
