All I'm saying is that like a normal stock split, say a 2 for 1, you have nothing more, nothing less than just prior to the split. It's afterwards that the fun begins.
I'm not sure of the exact number, but I read somewhere (Value Line I believe) that when a stock splits the normal way (forward split), XYZ Corp. is the usual scenario:
XYZ Corp.: If you owned 200 shares of a $50 stock, on a 2-1 you will now own 400 shares @ $25. Either way your value is $10,000. A study has showed that after this type of split, the stock continues to outperform the market. I owned American Power Conversion once, at it split 3 times in four years.
JoePennyStock Corp.: If you owned 10,000 shares of a $.043 stock, a 1-400 reverse split will give you 25 shares of a $17.20 stock. Once again your investment is unchanged, it's still worth $430....BUT
it's where the stock goes after the split. A forward split will continue to perform well in most cases (a lower stock price tends to let more investors into the stock), a reverse split accomplishes the listing goal (if that's the company's intent), but I'll bet you a $100 that a reverse split will decrease in value during the short and long term, and imho, substantialy. Good Luck, just my two cents.
BD |
