You can post information that is negative in nature, perhaps even damaging in the short term of a stock, and still be a stand up guy. The trick is not to brow beat everyone in the stock. No one currently holding can be happy today, the last thing they need is someone rubbing their noses in it. Why not try the high road and say it like this.
The stock was already in a difficult situation with the lack of activity. Now that a proposed reverse split is on the horizon, it looks like it will be a rough ride for awhile. Reverse splits often tend to return back to the price they were at before the split. What does this mean for the future of the company?
No one knows for sure. On the one hand it will drop in price for a while to be sure. If one truly believes that the financing will come through and that the sega deal will ultimately make the company profitable, then this is just a speed bump, that will create a buying opportunity for those that can keep calm.
On the other hand, if you believe that the company will not be able to get the financing even after the reverse, then this is the beginning of a slow death.
The question is , which answer is right. It is not enough to say ans #1 or ans #2. Intellegent discussion for both possibilities is now needed here. We need to find out if this will help get the financing. If it will, then the long term prospects of owning shares post split is good, because the float will be four times smaller.
I would like to see dialogue about this issue. Name calling or I told you so's are really wastes of energy. I, for One, am watching. If the split goes through, and the price does drop, I will be hovering waiting to decide to buy. My decision to buy will be the financing, period.
Put it this way. let's pretend the worst happens, and after a four for one split happens, the stock tanks down to 1 cent. (who can predict these things.) so I see this happen, and it looks like financing has a 70% chance of happening within 6 months. I gamble and buy $5000 worth of stock, or 500,000 shares. Six months later financing goes through and the company only makes 4 cents earnings per share (1 cent earning pre split). In this sector, an EPS of 20 isn't off base, so that places the stock at 20 cents per share.
Is this how it will unfold???Beats me, maybe the shares will only drop to 5 cents or 7 cents, maybe earnings will be over 20 cents. who knows.
what we really need to discuss is the prospects of the financing. How much is needed? When It is needed, what the potential revenues could be, based on acquiring financing.
This is how I think I would like to discuss the stock. Any other takers??? |
