RE: the r/s by Goldenpad1
Goldenpad1 comments,
"...if they get the r/s I hope that you don't hang it up."
This is a matter of risk management. A reverse split of
the nature proposed by Intrepid leaves no choice but to
sell off all shares to protect invested capital.
Protecting your invested capital is more important than
is making profits. A loss of capital reduces your ability
to earn future profits.
Intrepid does not enjoy a fundamental level which will
support a higher share price much less a listing on the
big boards, such as the NASDAQ board being a tech stock.
Theory is a higher share price will qualify for and attract
mutual funds and other managed investment vehicles. My
opinion is those advising Intrepid and the board of directors
are making poor market decisions. Mutual fund managers and
the such, look for value growth stocks which exhibit good
fundamentals, a profitable state and very good potential
for future company growth. Certain criteria must be met to
protect the invested capital of retirement funds and similar
provided by labor unions, public employee vehicles and other
employment packages of this nature.
Intrepid does have future potential, a significant potential.
However, Intrepid is not profitable, is lacking cash and is
considered a high risk venture by lenders. This high risk
presented by Intrepid disqualifies this company for typical
inclusion in a mutual fund and other investment devices.
Currently, Intrepid is generating more cash influx through
a very low share price by means of infamous Cornell Capital
than would be generated by a two dollar to three dollar per
share price.
Traders and investors, like us, are keeping trading volume
relatively high thus a steady flow of incoming cash to fund
the credit line through Cornell. People like us are looking
to buy "true" penny stocks with a hope, maybe even a real
belief we will make big bucks in the future. We are certain
hard core risk taking traders, not so much prudent investors.
Mutual fund managers and the like are not willing to take
the same high level of risks as we take. These type of
managers look first to protect their employment position
through safe prudent investment of others monies.
We are playing with only our money and cannot be fired
for those losses we periodically suffer.
Almost all Intrepid share holders, most recently, are
betting on future potential. There are no day traders
because there is no volatility. There are no mutual fund
managers playing because risk is too high. A higher share
price will not change the "type" of current share holders
rather will reduce volume and reduce share value. With a
higher share price, traders like us will shy away and
continue our habit of looking for true penny stocks, often
stocks with a share price under ten cents per share.
For circumstances, for fundamental circumstances presented
by Intrepid, a large reverse split virtually always results
in falling share prices albeit higher share prices. Net
effect is much lower per share value than prior to a reverse
split. Other words, we lose invested capital.
Number One rule is to protect your capital.
Traders like us are aware a reverse split at this stage
of development for Intrepid will almost certainly result
in falling share prices and subsequent loss of capital.
Just before and upon a reverse split, many of us will
begin dumping our shares, as quickly as possible, which
will initiate a downward spiral of share price. This loss
of share value will accelerate over time and will hasten
as share prices begin to fall faster. This falling of share
prices after a reverse split is self-feeding, an implosion.
With share prices falling after a reverse split, those
fund managers, who might take a risk, are not about to
invest money in a company exhibiting falling share value.
Final outcome is long term holders dumping, day traders
looking elsewhere and high-end fund managers moving on.
Those who profit from these circumstances will be shorters
who will contribute to falling share value as is possible.
Intrepid has much potential, very great potential. Nonetheless
this is not the right time for a major reverse split. Intrepid
does not have needed fundamental quality to support a reverse
split as is proposed by the board of directors.
The current board of directors is a fine crew. All are experts
in this field of digesters and excellent engineers. However,
none of the board of directors are expert stock market players.
Quite the opposite, I believe the board of directors are
equal to naive children when this comes to well understanding
stock market mechanisms and stock market players.
Based on comments made by Steve Ellis, there seems a good
chance the board of directors will rescind their decision
to effect a reverse split. This is my hope and belief.
What do you suppose will happen to share prices should the
board of directors announce there will be no reverse split?
What do you suppose will happen to share prices should the
board of directors payoff Cornell and seek funding elsewhere?
Purl Gurl |
