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Microcap & Penny Stocks : Rentech(RTK) - gas-to-liquids and cleaner fuel -- Ignore unavailable to you. Want to Upgrade?


To: Rock who wrote (11067)10/20/1998 9:22:00 AM
From: Larry Voyles  Read Replies (1) | Respond to of 14347
 
A RS is a very, very bad thing. In theory, a RS looks great, as it would drive up share price, right?

That's not the way it works in practice.

If RNTK did a 5-for-1 RS (horrors!), the stock price should go up to $3.75 (5 x $.75), right? Sadly, a RS almost always causes severe erosion in share value, so instead of $3.75, the stock price could end up around $2.00 instead. Maybe it wouldn't be so bad, but then again, it could be worse.

One theory (not mine): A forward split increases the float and fuels trading activity, but a RS decreases the float, lowers the volume and makes your shares less liquid, resulting in a drop-off in price.



To: Rock who wrote (11067)10/20/1998 10:28:00 AM
From: CYBERKEN  Read Replies (1) | Respond to of 14347
 
The discussion of delisting and reverse splits for Rentech has life only on this thread and is based on nothing other than a desire by some to trash the company and it's shareholders.



To: Rock who wrote (11067)10/20/1998 12:54:00 PM
From: rjbac  Respond to of 14347
 
Hi Rock,

A RS is almost always a disaster. The market views this situation as similar to a bankruptcy and the stock price plunges. I have only seen this strategy work once or twice where it was done on the heels of absolutely stupendous news and in a great market.

Bac