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Microcap & Penny Stocks : PLFM - Undervalued with great potential
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To: tony schwarz who wrote (8791)1/14/2000 3:44:00 AM
From: Mike  Read Replies (2) of 9096
 
For those of you who follow the RB board, the question was raised: How would a reverse split allow the company to raise capital? Here's how it would work:

40 million shares authorized and outstanding.

Let's assume 1:2 reverse split.

Now, there's 40 million authorized; 20 million outstanding.

This leaves 20 million to use for raising capital.

I suppose it COULD work, however, reverse splits are RARELY perceived as a positive, and usually have a drastic short-term negative impact on the price. Simply increasing the authorized shares is FAR better since everything remains the same until the newly authorized shares are issued, which usually means either a normal split, or a cash infusion.

I hope this helps.

Still long
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