Comments on: Why Companies Use Reverse Stock Splits http://allfinancialmatters.com/2007/11/26/why-companies-use-reverse-stock-splits/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 25 May 2012 02:50:51 +0000 hourly 1 http://wordpress.org/?v= By: Russell Bailyn http://allfinancialmatters.com/2007/11/26/why-companies-use-reverse-stock-splits/comment-page-1/#comment-179923 Russell Bailyn Tue, 27 Nov 2007 21:43:19 +0000 http://allfinancialmatters.com/?p=2154#comment-179923 My understanding is that reverse splits usually aren't as much a 'marketing gimmick' as regular splits. Companies need to reverse split to encourage trading in their shares. Having a higher trading volume and having a share price over a certain price (usually $1.00 for the Nasdaq) keep shares properly listed so they aren't delisted and moved to the pink sheets or some other less desirable exchange. My understanding is that reverse splits usually aren’t as much a ‘marketing gimmick’ as regular splits. Companies need to reverse split to encourage trading in their shares. Having a higher trading volume and having a share price over a certain price (usually $1.00 for the Nasdaq) keep shares properly listed so they aren’t delisted and moved to the pink sheets or some other less desirable exchange.

]]> By: Jordan http://allfinancialmatters.com/2007/11/26/why-companies-use-reverse-stock-splits/comment-page-1/#comment-179174 Jordan Tue, 27 Nov 2007 01:12:32 +0000 http://allfinancialmatters.com/?p=2154#comment-179174 what causes the drop in total ownership after the split? if they turned 1000 shares into 50 shares, the total value should have ended up the same, right? so each share should have been worth 17.60 after the split, not 15.00. or am I missing something? what causes the drop in total ownership after the split? if they turned 1000 shares into 50 shares, the total value should have ended up the same, right? so each share should have been worth 17.60 after the split, not 15.00. or am I missing something?

]]> By: Jay Muntz - valueaverager.com http://allfinancialmatters.com/2007/11/26/why-companies-use-reverse-stock-splits/comment-page-1/#comment-179166 Jay Muntz - valueaverager.com Tue, 27 Nov 2007 00:59:34 +0000 http://allfinancialmatters.com/?p=2154#comment-179166 I think it's folly to try to draw any conclusion from a stock split (or reverse split). If the company explains why it's doing it, then that explanation might be useful information. If they don't explain it, then any conclusion you draw is likely to be wrong. If you really want to research a company, there are 100s of more important things to look at than an issue like this. I think it’s folly to try to draw any conclusion from a stock split (or reverse split). If the company explains why it’s doing it, then that explanation might be useful information. If they don’t explain it, then any conclusion you draw is likely to be wrong.

If you really want to research a company, there are 100s of more important things to look at than an issue like this.

]]> By: Curtis http://allfinancialmatters.com/2007/11/26/why-companies-use-reverse-stock-splits/comment-page-1/#comment-179083 Curtis Mon, 26 Nov 2007 22:31:17 +0000 http://allfinancialmatters.com/?p=2154#comment-179083 Don't forget, sometimes they can do a reverse split just to keep their listing. Locally, Savvis Communications (SVVS?) did a reverse split a couple years ago to stay on NASDAQ. They've done quite well since, but not related to the reverse, just normal business. Don’t forget, sometimes they can do a reverse split just to keep their listing. Locally, Savvis Communications (SVVS?) did a reverse split a couple years ago to stay on NASDAQ. They’ve done quite well since, but not related to the reverse, just normal business.

]]> By: muddlehead http://allfinancialmatters.com/2007/11/26/why-companies-use-reverse-stock-splits/comment-page-1/#comment-179081 muddlehead Mon, 26 Nov 2007 22:25:43 +0000 http://allfinancialmatters.com/?p=2154#comment-179081 take it to the bank. if you own a stock which reversed split, sell it yesterday. take it to the bank. if you own a stock which reversed split, sell it yesterday.

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