Re: More RS discussion/SPQ optics
in response to
by
posted on
May 04, 2009 08:21AM
First Explorer at the "Ring of Fire" and presently drilling on the "BIG DADDY" Chromite/Pge's jv'd property...yet we were robbed
Thanks Hoov and Snug. Both these posts are excellent and informative. Sadly, when one thinks there is a boogy man in the closet no amount of reason will change that mind. Nice try anyway. Once upon a time many years ago as an investor novice, I thought reverse splits were bad. Why not?? After all I had seen a few failures and most commentary I read said they were bad. Then I got lucky and found an experienced man who started to give me some ideas to explore. A reverse split is actually simple math. The example Snug gives shows that. 100,00 SPQ at .04 is the same as 10,000 at .40 cents. That's no illusion!!! plain old simple math. What happens after is simple functioning of the market. If the majority do not like it, they simply vote with their feet and leave. So the price will drift down. Occasionally, it will simply drop quicker. But most often it drops in an orderly manner. But once in a while, a few companies that do a reverse split do rise. Now it is time to look at #5 on Hoove's list. When most share holders realize this is true, the shares do the opposite of the down trend I wrote about first. I'd like to start a new paragraph here but can't get it to work. I was a small shareholder in SPQ when the RS was proposed a while back. I liked the RS idea but most didn't. I didn't vote either way because with a few shares I was in " didn't care or matter mode ". Now, with others, I control enough to care. I will be voting this time for a RS. While a RS is simple math it does have much more revelence to fundamentals. If the fundamentals of a company are poor, the SP will go back down. What, pray tell me, is going to keep it up?? No fundamentals will be an opportunity to dump it. SPQ has good fundamentals. That will support the price on a RS. #5 from Hoov comes back into play here again. Nobody can predict the daily price over the short term. So why try?? I bought SPQ because I liked what I saw in the company. I bought more with more good news. If there is more good news the price will rise higher again. It will do that from .04 or from 40 cents. But again, as Hoov has stated, from 40 cents it will rise further and be worth more. It is easier to raise more money as well. Snug and Hoov are very respected writers here. Stop and consider what they are saying. If reverse splits are so bad, then why do some go up? When you can figure out why some go up when so many go down, then you will be a lot wiser. But until then, keep thinking!!!!