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Microcap & Penny Stocks : Dollar and Under Sleeper Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Edward Ip who wrote (4303)	2/5/1998 8:09:00 AM
From: Rob D.	Read Replies (1) \| Respond to of 8835

Edward- I have only been watching pennies since Sept 97, but I have never seen a reverse-split not be damaging. If the share price is .50 and you have 1000 shares and they do a 1 for 2 reverse, you will now have 500 share at $1....but the MM's will bring that price way down, probably to .50 again....but now you have half the shares... Always best to wait until after the split for the new floor. Then buy in. Rob D.

To: Edward Ip who wrote (4303)	2/5/1998 4:20:00 PM
From: _Highlander	Respond to of 8835

Traditionally, a reverse split reduces your holdings by the ratio of the split. If you have 1000shares, a 10/1 will leave you with 100. If the value was 10 cents, the new value will be 1 dollar (this means the value of your holdings remains unchanged. The downside is that previously you had 1000 shares = $1000 and if there was a 10-cent fluctuation upwards, you could make $100 less costs... After the split, you will have 100 shares = $1000, but you will need a $1 rise in value to make $100! Simple logic tells you that it is more probable to get a 10-cent rise than a $1 rise. Taking it a step further, in terms of traditional events, once a stock has gone from .10 to $1 via the reverse split, it quickly falls back to being worth only .10 once again. Given a week of depression, the original $1000 will probably be worth about $10! I once watched a stock (TCHP) get bought for $1, drop to .05, do a 20/1 reverse split and drop again to .0325 - all within a month or so. The clever investor (my neighbor, actually) paid $10,000 for 1000 shares. You can do the math if you want an exact accounting, but I believe his $10,000 was worth about $18 in less than a month! He is one pissed dude <heh>. The bottom line on that one was 50 shares X .0325 (3 1/4 cents). There was no long-term warning on that one and when it dropped to .05, I personally gambled that it would rebound from there to maybe .25 for a nice kill, so I bought 10,000 for $500 ... after the split, I, too, only had 50 shares, and they were still worth $500. They went up to about $675 and I sold for a small profit, then watched the bottom fall out a second time! For me, these penny stocks are 'penny-ante' and I am happy if I can turn a few hundred dollars a week on them. It helps to... "Know when to hold 'em... Know when to fold 'em... Know when to walk away And know when to run..."