Investors

[Scorcher]

A few years ago I bought an otcbb stock. It seemed to have potential. Over a period of 4yrs., with periodic buys an investment of 5,000 was worth 11,000 and I was pretty happy. Today I checked and it was showing at 10 times per more share than yesterday! I checked my account and my total balance was the same. I called the brokerage company and was told that the Company was doing a reverse split at 10 to 1. Which means my stock is worth more per share but I now have one-tenth the shares. this makes this stock worth 10 times less as a long trm investment. Shouldn't I have been notified as a stock holder? Can a company just arbitrarily do this? As of close today I still haven't found out how many shares I have because it hasn't been completed. I feel like my investment has nose-dived.

[dmarc117]

you still have the same investment. instead of 10 shares, you now have 1. or whatever multiple of 10 u own. its the same as a normal 2 for 1 stock split. for every 1 share you own, you get another. but the stock price halves. you have the same dollar value.

not sure the rules of notifying, but think that they must have to.

[geeteebee]

Huh? 1/10th the number of shares times 10x the stock price equals the same amount as it was worth pre split. You did not lose any value due to the reverse split.

 

Companies do this to avoid delisting. Any company that trades below a buck is a candidate for a reverse split.

[TheGrunt]

A few years ago I bought an otcbb stock. It seemed to have potential. Over a period of 4yrs., with periodic buys an investment of 5,000 was worth 11,000 and I was pretty happy. Today I checked and it was showing at 10 times per more share than yesterday! I checked my account and my total balance was the same. I called the brokerage company and was told that the Company was doing a reverse split at 10 to 1. Which means my stock is worth more per share but I now have one-tenth the shares. this makes this stock worth 10 times less as a long trm investment. Shouldn't I have been notified as a stock holder? Can a company just arbitrarily do this? As of close today I still haven't found out how many shares I have because it hasn't been completed. I feel like my investment has nose-dived.

I'm almost positive the reason a company does a reverse stock split is because it makes the stock less volatile to day traders manipulating the price (usually because the price is so low that a $1 increase, or just an increase in pennies will be a big percentage gain. The same with a loss. So a reverse stock split makes it less possible for a single investor to buy or sell a major portion of their shares and manipulate the price.

 

In either case, I owned a stock that was at about $1, and after the reverse stock split was now at $10, but I have 1/10th the amount of shares as before the reverse stock split. This DOES NOT [edit: is not likely to cause] harm to a stock, especially as a long run investment. Also, it can take up to 10 or so days before your brokerage account complete the reverse stock split and updates your share numbers. The reverse split is instant, but the numbers updating are not. Patients is key here. I'm pretty sure if you're still skeptical of the stock you can sell all of your shares whenever you want to, you just might have to call a number to do so. Not sure on that one though.

Edited November 29, 2007 by TheGrunt

[Scorcher]

Huh? 1/10th the number of shares times 10x the stock price equals the same amount as it was worth pre split. You did not lose any value due to the reverse split.

 

Companies do this to avoid delisting. Any company that trades below a buck is a candidate for a reverse split.

 

Here's my point, I'm taking the risk with them. I went from 40,000 shares to 4000. In the future if the stock goes to 10.00 a share it's worth 40, 000. If they had left it like it was it would be worth 400,000. The investment doesn't have the potential that I took the risk on.!

[muck]

Here's my point, I'm taking the risk with them. I went from 40,000 shares to 4000. In the future if the stock goes to 10.00 a share it's worth 40, 000. If they had left it like it was it would be worth 400,000. The investment doesn't have the potential that I took the risk on.!

 

You're not very good at math.

 

That's ok.

 

40,000 shs @ $1.00 ea = $40,000

4,000 shs @ $10.00 ea = $40,000

 

$1.00 stock that goes to $10.00, the stock is worth 10x what it was

$10.00 stock that goes to $100.00, the stock is worth 10x what it was

 

40,000 shs increasing from $1.00 to $10.00 = $36,000 gain

4,000 shs increasing from $10.00 to $100.00 = $36,000 gain

 

SUMMARY: You are no better or worse off today than you were yesterday.

[Donutrun Jellies]

You're not very good at math.

 

That's ok.

 

40,000 shs @ $1.00 ea = $40,000

4,000 shs @ $10.00 ea = $40,000

 

$1.00 stock that goes to $10.00, the stock is worth 10x what it was

$10.00 stock that goes to $100.00, the stock is worth 10x what it was

 

40,000 shs increasing from $1.00 to $10.00 = $36,000 gain

4,000 shs increasing from $10.00 to $100.00 = $36,000 gain

 

SUMMARY: You are no better or worse off today than you were yesterday.

Well stated, Muck ... ADDITIONAL SUMMARY: It is truly time to take a formal stock market class if you have that much money in it and need this kind of instruction from a fantasy football message board ...

[skylive5]

Well stated, Muck ... ADDITIONAL SUMMARY: It is truly time to take a formal stock market class if you have that much money in it and need this kind of instruction from a fantasy football message board ...

 

The beauty of THIS particular football message board is that we have experts in just about every field you can think of. You always get an informed answer somewhere in a thread by someone who works in a particular field daily. Such as Muck in the finance/stock world.

 

[detlef]

Here's my point, I'm taking the risk with them. I went from 40,000 shares to 4000. In the future if the stock goes to 10.00 a share it's worth 40, 000. If they had left it like it was it would be worth 400,000. The investment doesn't have the potential that I took the risk on.!

 

 

You're not very good at math.

 

That's ok.

 

40,000 shs @ $1.00 ea = $40,000

4,000 shs @ $10.00 ea = $40,000

 

$1.00 stock that goes to $10.00, the stock is worth 10x what it was

$10.00 stock that goes to $100.00, the stock is worth 10x what it was

 

40,000 shs increasing from $1.00 to $10.00 = $36,000 gain

4,000 shs increasing from $10.00 to $100.00 = $36,000 gain

 

SUMMARY: You are no better or worse off today than you were yesterday.

FWIW, while muck's math is completely spot on, it might not clearly answer the question posed. Actually, it's not. Muck's off by a decimal spot in the overall gain department but that doesn't matter here. I think dude's point has more to do with the perception that a stock is more likely to go from $1 to $10 than it is from $10 to $100, which, if I'm not mistaken is the whole allure of penny stocks.

 

This would be true if not for a very fundamental flaw in the logic.

 

If there were only 4,000 shares of a $1 stock it would be much more likely (all things being equal in terms of how coveted the stock is, of course) that it would go to $10 than it would for 4,000 shares of stock worth $10 going to $100. After all, you'd only need to find $40,000 worth of customer's money to drive that move as opposed to $400,000. However, that is not the case. The very root of why stocks go up is because enough money wants to move in. Either way, it's going to take $400,000 to move that stock up whether you're moving 40,000 very cheap shares or 4,000 more expensive ones.

[Scorcher]

The beauty of THIS particular football message board is that we have experts in just about every field you can think of. You always get an informed answer somewhere in a thread by someone who works in a particular field daily. Such as Muck in the finance/stock world.

 

 

Exactly why I posted. Thanks for the responses, and I see the flaw in my thinking. This situation didn't bother me as much as when I benched Curtis and he had 3 td's.

[dmarc117]

Exactly why I posted. Thanks for the responses, and I see the flaw in my thinking. This situation didn't bother me as much as when I benched Curtis and he had 3 td's.

 

 

i unfortunately have too many penny stocks in one account that would cost more in commissions to sell then what they are actually worth.

 

[Atlanta Cracker]

The other thing to consider relative to the likliehood of a stock price going from 1 to 10 or 1/10th the number of shares going from 10 to 100 is the underlying valuation of the company. Though the $$ increase is different the percentage increase in value of stock which translates directly to the value applied to the company is the same.

 

Bottom line is that if the company does well you should benefit either way. Certainly stock price doesn't always (or ever) exactly reflect underlying company value but it's certainly a good indication of the perceived value.

 

Now, having said that, for the most part companies that I've seen doing reverse stock splits aren't in very good shape and the stock price got to the low level it was for a reason and may very well trend back in that direction even after the reverse split meaning you should closely analyze the company and it's prospects if you intend to hold on.

[detlef]

i unfortunately have too many penny stocks in one account that would cost more in commissions to sell then what they are actually worth.

 

Color me surprised.

[dmarc117]

Color me surprised.

 

 

quick question....how much money has your place made you this morning?

[detlef]

quick question....how much money has your place made you this morning?

Umm, marc. Guess what. I have investments too. My wife and I have this crazy plan. We both work, then we take that money home and invest it. Oh, and to answer your question, I just took a deposit for a special luncheon next month for a spam group. 25 people at $50 a head. So, I just "made" half the money right now.

 

Of course, I know what you're talking about. It's a real bummer that most of the money I make happens at night when I'm at home with my wife and my crew is running the show. Because everyone knows, it doesn't really matter how much you make, it's what time of the day you make it.

[dmarc117]

Umm, marc. Guess what. I have investments too. My wife and I have this crazy plan. We both work, then we take that money home and invest it. Oh, and to answer your question, I just took a deposit for a special luncheon next month for a spam group. 25 people at $50 a head. So, I just "made" half the money right now.

 

Of course, I know what you're talking about. It's a real bummer that most of the money I make happens at night when I'm at home with my wife and my crew is running the show. Because everyone knows, it doesn't really matter how much you make, it's what time of the day you make it.

 

 

ive been working for 1.5 hours today and have made more than half of the people in the US have made this year. so my hours aint too shabby either. oh, im home by 315pm everyday too.

Edited November 29, 2007 by dmarc117

[TheGrunt]

I'm a somewhat noob-like investor, but I've been watching Jim Cramer's "Mad Money" on MSNBC (every week day @ 3pm West Coast Time). It's probably one of the most informative, goofy, but easy to understand shows I've ever watched about investing. If you are an investor and have an hour to watch (or TiVo) Mad Money, I highly suggest it! This is a show for someone interesting in learning about the stock market, as well as for the experienced investor wanting an experts opinion too - never a bad thing when it comes to your money. The best part is if you are on the East Coast (I think) you get to watch the show live, as I'm pretty sure it's not live for us west coasters, but you can even call in or send email question to Cramer and he'll answer them for you on the show. It's pretty cool, actually. Just thought I'd share that with everyone...

[Riffraff]

ive been working for 1.5 hours today and have made more than half of the people in the US have made this year. so my hours aint too shabby either.

 

:sarcasm:

 

300 million people in the U.S. Divide by 2. 150 million.

Let's say that you lucked out and only got the minimum wage people in America.

Minimum wage is roughly $6 nationwide.

 

You made more than $900,000,000 in an hour and a half?

Heck, that's just one hour's pay. Now, you said you made more than they made this year (almost the end of November; 11 months of pay).

Wowzers.

 

You should take the rest of the day off.

The richest person in the world hangs out at the Huddle.

Who knew?

 

Is this you?

[TheGrunt]

I wonder what'd really be like to be the richest person on Earth.

[dmarc117]

:sarcasm:

 

300 million people in the U.S. Divide by 2. 150 million.

Let's say that you lucked out and only got the minimum wage people in America.

Minimum wage is roughly $6 nationwide.

 

You made more than $900,000,000 in an hour and a half?

Heck, that's just one hour's pay. Now, you said you made more than they made this year (almost the end of November; 11 months of pay).

Wowzers.

 

You should take the rest of the day off.

The richest person in the world hangs out at the Huddle.

Who knew?

 

Is this you?

 

lol....im just that good, what can i say

[detlef]

ive been working for 1.5 hours today and have made more than half of the people in the US have made this year. so my hours aint too shabby either. oh, im home by 315pm everyday too.

So, are you that jerk-off washing his convertible talking about how great is life is on that "make millions from home" commercial they play on Comedy Central? Glad to see it's working out for someone. How much did it cost for the starter kit?

[isleseeya]

True Reverse Split !

[dmarc117]

So, are you that jerk-off washing his convertible talking about how great is life is on that "make millions from home" commercial they play on Comedy Central? Glad to see it's working out for someone. How much did it cost for the starter kit?

 

 

i dont work from home. now go make me a lulubee taco!

 

why do you hate successful white men?? are you jealous??

Edited November 29, 2007 by dmarc117

[Perchoutofwater]

Well stated, Muck ... ADDITIONAL SUMMARY: It is truly time to take a formal stock market class if you have that much money in it and need this kind of instruction from a fantasy football message board ...

 

Screw that. If he has $40,000 tied up in one stock, he is one of two things. He is either an idiot for having all his eggs in one basket, or he has quite a few other baskets. If he has other baskets, he should turn them all over to a good money manager, and then take an art class where he gets to paint nude college women, rather than a stock market class.

[detlef]

Screw that. If he has $40,000 tied up in one stock, he is one of two things. He is either an idiot for having all his eggs in one basket, or he has quite a few other baskets. If he has other baskets, he should turn them all over to a good money manager, and then take an art class where he gets to paint nude college women, rather than a stock market class.

werd