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Microcap & Penny Stocks : TSIG.com TIGI (formerly TSIG) -- Ignore unavailable to you. Want to Upgrade?

To: bigwali who wrote (39806)	2/29/2000 8:17:00 PM
From: BishopsChild	Read Replies (1) \| Respond to of 44908

that was a good warning you linked...... I guess to all the LONGS that do believe, the LAST paragraph applies most..... A reverse split is often a precursor to worse times ahead. If you get a notice that your stock is about to have one, double check your reasons for owning it. If the story still sounds good, stay with it. But if you don't see any improvement shortly after the split occurs, watch out.

To: bigwali who wrote (39806)	2/29/2000 9:05:00 PM
From: JWC	Read Replies (1) \| Respond to of 44908

Anyone have any idea what the share price will be at when the RS (if TSIG has a RS) happens?

To: bigwali who wrote (39806)	2/29/2000 9:32:00 PM
From: JWC	Read Replies (1) \| Respond to of 44908

Reverse Splits April 9, 1999 - Stock splits are usually very positive. You own 100 shares, then the stock declares a 2 for 1 stock split, and after the pay date you own 200 shares. Of course, the price of the stock is cut in half to reflect the new shares outstanding, but it sure feels good to own more shares in a company, especially if it continues to go up. But what if you own 100 shares in a stock that declares a reverse split? What happens then? Before going into the math, let's look at what a reverse split is. A reverse split means that instead of receiving more shares, you lose shares. So if a company has a 1 for 10 reverse split, it means that you now own 10 shares of the company's stock if you started with 100. The hope is that the stock's price will also reflect this lower number of shares and go up 10 times. It never happens. That's because companies that do reverse splits typically have too many shares outstanding and not enough or no earnings. The companies usually have continued to sell shares to the public with plenty of future promise but then don't deliver it. With too many shares outstanding, with losses instead of earnings, and no interest from anyone to buy the stock, companies will often try a reverse split to see if it can generate new interest in the stock. At the very least, it takes many of the shares off the market. When and if there are earnings, there are fewer shares outstanding and therefore, there are higher earnings per share. That should help drive the price higher. But it usually doesn't. That's because these companies are oftentimes in deep trouble, and unable to get financing. One of the steps toward healing is to take stock off the market, thereby helping to boost the price if there is demand for the stock. Of course, the only reason investors buy stock is if there are earnings or strong cash flow or undervalued assets. Stocks with reverse splits rarely have those. In case you own a stock that has tens of millions of shares outstanding, is trading at one dollar or less, and has no earnings, you may see it have a reverse split. If it reverses 1 for 10, then you'll have only 10 shares of the new stock (the company actually exchanges your 100 shares for 10 shares - your broker does the exchange for you). But don't expect the price to go up 10 times. While it will increase the price for a while, unless the company comes through with earnings in a relatively short time frame, you'll find the stock wither down to its old levels, and you'll own even fewer shares. A reverse split is often a precursor to worse times ahead. If you get a notice that your stock is about to have one, double check your reasons for owning it. If the story still sounds good, stay with it. But if you don't see any improvement shortly after the split occurs, watch out.