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THE VOLUME KEEPS GOING UP EVERYDAY, THIS IS WILD, ANYONE THINK THIS STOCK MIGHT HAVE BIG GAINS SOON?
Posts: 37 | Registered: Oct 2006
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No. The company just did a reverse split about 2 weeks ago and the price went from .0001 to .02 (1:200 reverse split), and in the two weeks since then, the concensus is that the company dumped a ton of shares that brought the price all the way back down to .0001 again. No reason to think the price will go up. In fact, more than likely they'll do another reverse split, and the price will drop 99%+ again.
Posts: 5508 | From: Southeastern PA | Registered: Jan 2006
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Can you explain reverse split to me. Why does the value go down with this? How is it fair? What is the logic behind this?
Posts: 37 | Registered: Oct 2006
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Simple explanation is this. Say there are 100million shares of a company's stock out there, and the stock is trading at a penny. the company decides that not enough people are looking at their company because the price is too low, so they lower the number of shares to 1 million and increase the price by the inverse of the ratio, to $1. the value of the company, and your shares, are the same, so there's nothing unfair about it.
the problem lies with companies like this who sell shares and drive the price down to the point taht no one wants to pay them for the shares. So they do a reverse split to get the price up and then sell until no one wants them again. Lather, rinse, repeat.
Posts: 5508 | From: Southeastern PA | Registered: Jan 2006
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PCola, I bough some shares for 0.002. I lost a lot of money. What is your advice? Do you think the price might go back up to 0.002?
Posts: 37 | Registered: Oct 2006
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