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Biotech / Medical : Techniclone (TCLN)
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To: Jibacoa who wrote (2753)12/3/1998 9:57:00 PM
From: Maurice Winn  Read Replies (2) of 3702
 
Jibacoa, you say the reverse split for Cytel didn't help one bit, but

1 It won't be delisted now, which some consider a happy outcome.
2 The bid/ask was 12 cents at the close on $3.50 which is 10% MORE than the 3 cent TCLN spread but during the day, the spread was lower at 5 cents. So there is a saving there. Very, very thinly traded so not surprising that there is a bigger spread than well-traded TCLN.
3 At $3.50 it is still not marginable, so no advantage there. They needed to do a bigger reverse split to get that advantage.
4 Also, not above the arbitrary $5 cutoff so many seem to use for considering companies. So no advantage there.

A long term down trend is a function of fundamentals, which is what we are not discussing with reverse splits. I don't think anybody thinks that a reverse split will change fundamentals and long term trends which result from those fundamentals. Sure Cytel had been in a long downtrend. Unless the losses causing that are fixed, that trend should continue.

The basic point though is that the reverse split did NOT cause a price collapse as predicted by many here. So the theory of reverse split collapse is simply false.

Now the picture will grow cloudy with fundamentals and the effect of a reverse split becomes obscured.

So I'm done with reverse splits. The collapse theory is disproven.

Did anyone believe their own theory and short Cytel?

Maurice
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