Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : 1ST MIRACLE GROUP (MVEE), founders last co. went $0.20-$46 -- Ignore unavailable to you. Want to Upgrade?

To: LegalBeast who wrote (543)	7/4/1998 2:29:00 PM
From: Stephen Goldfarb	Read Replies (1) \| Respond to of 5541

A reverse split, per se, does not affect market capitalization. What typically happens (perhaps you are be alluding to this) is that after the reverse split, share price tends to erode from whence it came. Reverse splits are often done in companies with no earnings momentum. In the absence of company growth, there is nothing to sustain share price at its new elevated level. It may be different with a company that has earnings momentum. Investors may continue to purchase, which would have the effect of sustaining or improving share price. Making purchases by distributing equity often benefits a company, compared to borrowing money. The downside is dilution. It's a balancing act by company management. We often have to live with it, for better or worse. Steve