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Microcap & Penny Stocks : TNRG Tianrong Building Materials -- Ignore unavailable to you. Want to Upgrade?

To: Loren S. who wrote (3218)	9/1/1998 5:59:00 PM
From: ISOMAN	Read Replies (2) \| Respond to of 9824

I realize that some companies have done some reverse splits in the very recent past, so everyone is a little touchy about the reverse split issue. Let's be logical about this. First TNRG has approximately 40 million shares issued. second TNRG is authorized to issue 100 million shares. A company will sometimes try a reverse split for a variety of reasons. The most common two are: #1 to bring the share price higher to qualify for a bigger board, namely nasdaq or amex. #2 to reduce the outstanding shares so that more can be issued to buy more stuff. Let's look at reason #1 . With a share price of 3.5 cents (or even 15 cents) it would take an awfully large reverse split to get to the $4.00 qualifying price of the Nasdaq small cap. Tilton would have to do a 115:1 reverse split to get to $4.00 Does that make sence? Reason #2 happens when a company is cash poor and has no more shares to issue. Tnrg has stated that they are now profitable. They also have 60 million shares left to issue, if they really need to. So why all of the talk about a reverse split? The holders of the debentures (which by the way are at a fixed conversion price, and are not Floorless and have a 3 year restriction) agreed to a conversion price of $3.00. They felt the company had a book value of $3.00 when they wrote the deal with Tilton, otherwise, the conversion price would have been lower, or the deal would never have happened.