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Microcap & Penny Stocks : TPII - Year 2000 (Y2K); Groupware; Client Server Migration
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To: bpf who wrote (10629)4/25/1999 11:40:00 AM
From: Alan Coccio  Read Replies (1) of 10903
 
Yup, the Steelman explained it. There are times when a reverse split can do a company some good but I've only seen it work when a company has strong fundamentals, is trying to get its stock into a certain price range and the number of outstanding shares at a more attractive level. Usually, when these BB stocks do it, you will see the price start off a dollar in Steelguys example and very quickly return to or near the old price level which means the shareholders have lost 90% of their investment as a result. Not a good thing.

As the company does more and more convertible debentures, the number of outstanding shares will spiral out of control almost ensuring they will never have a positive EPS. They'll eventually have to confront that issue and I don't see any way out other than a reverse split.

By the way, no one ever displays naïveté by asking questions. It's only a display of wanting more knowledge and that's a good thing.
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