(another one I want to keep)
To: Creede Bighorns who wrote (1512) 4/16/2006 1:23:13 PM
From: rrufff Read Replies (1) of 1514
In pinkie land, we see a lot of talk about stock dividends, forward splits and reverse splits, spin offs, mergers, and acquisitions.
If it comes down to just "shuffling the paper," you haven't really created any value. Sometimes a perception of value is created and leads to a higher price.
Issuing of more shares does not create value, just as cutting a pie into 8 pieces as opposed to 4 does not create more pie.
For example, splitting a $5 stock into 10 pieces doesn't create value, but may attract lots of penny stock players. On the other hand, I've seen others argue that they are trying to attract more stable investors by reverse spliting a .50 stock 1/10 so that the share price starts at $5.
In this case, HISC has a business that has been adding ActSoft and we know about most of the business. Unless the new OTC BB entity has a business (the hints are that it is a shell), there is no real value added. When HISC goes ex-dividend, the likely initial result will be that that HISC share price will be reduced by the initial share price for the new entity. E.g. if the new entity opens at .50, the HISC price will be reduced from .06 to .05 (.50 divided by 50 = .01) so that the net result is no gain or loss.
That's when perception takes over and it's anyone's guess at that point. My point was that if HISC went down to .02 from .06 because most of the assets went into the OTC BB company, it would take a share price of $2 on the OTC BB to make a shareholder whole.
In LFWK, they are promoting a possible CASH dividend, partially to offset what they say is a huge naked and MM short position. This is not merely paper shuffling. In LFWK's case, if they do it, you will get actual cash. This will likely attract buyers who wish to take advantage of owning a rare penny stock that gives back cash. Plus, it would force covering of the claimed huge short position.
GodBless-ND
cris
(Some of this is really making my brain hurt! lol) |
