Please correct me if I'm wrong, but with the 10/1 split, Per the Yahoo company profile, the current amount of outstanding shares is going from 27,800,000 to 2,780,00. Is anyone worried about secondary offerings ? With that little amount of outstanding shares, looks pretty safe to say... Yes.
From stockdetective.com ... #08
When a company undertakes a standard stock split, things are usually going well. The business operations are profitable and growing, and the shares are moving steadily upward. Such is almost never the case for the company implementing a reverse split.
Pure and simple, reverse splits are facilitated to improve the appearance of the company and its stock price. The company whose stock is $5 appears more valuable than one whose stock is merely $1. But if the company really believed in its future and wanted to reduce its amount of outstanding shares, it would start to buy them from the market.
Furthermore, the stock is now ripe for a secondary offering of more shares by the company. For the pre-split shareholder, his percentage ownership in the company will endure a magnified degree of dilution the moment the new shares hit the market. The company's objective for the share offering has yielded the desired capital, but the risk has been transferred to the shareholders. It makes no monetary difference to the company. |
