No, FD. In two or three years everything may be fine for CVIA/WOTD but the original investors will not.
When the dust settle from this first reverse, a person who held 100,000 shares bought at .02 might find themselves with 333 shares at well under .25, with a pre-split cost basis of $6.00!! (And after some reverses, the stock can come almost all the way back...I am being kind assuming to tanks only to .25)
Theoretically, this beaten up position could someday crawl back. However, it is not unreasonable for one more minor reverse to occur again, to of course, see the Holy Grail of a NASDAQ listing. The next one might be a 30 for 1 to get over the threshold and stay there.
At that point, you would have 11 shares of a $7.50 stock!! If that erodes to but $4 and holds, artificially, to get the NASDAQ listing, the stock would have to do a 45 BAGGER for that person to break even.
The reasons original investors lose are that they bail out because 45 baggers just don't happen everyday, especially after reverses, and the time frames are enormous.
ToyH, a game company, did a reverse of 150 for 1. It is now a strong company with multiple profitable quarters and a great future. But the original share holders are not up, unless they averaged down. 150 shares of their original investment is now 1 share at mid $20 range. I doubt they paid under 15 cents for those pre-reverse shares. See what I mean?
TG |
