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Microcap & Penny Stocks : UNIVERSAL EXPRESS INC - USXP
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To: jmt who wrote (395)6/30/1998 3:59:00 PM
From: Catawbakid  Read Replies (1) of 2493
 
LEVERAGE!
IMO, what's lost in a reverse split is leverage. For instance, if you had bought 10000 shares at .06, your cost was $600. Now if your objective had been 5/8, your selling price would have been $6250. After the reverse split, you have 143 shares which would have to rise to 43 3/4 to equal the original 5/8 objective.
The moral of the story is to never invest in micro- stocks that have shares outstanding above a certain number. My own preference is to avoid stocks with more than ten million shares out.
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