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Cosi Inc. Message Board

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  • golfer18us golfer18us Nov 27, 2012 3:02 PM Flag

    1 for 10 reverse split very soon

    A stock split does nothing to change the future cash flows...and hence the value...of this company. The split won't make it any more attractive to sophisticated investors.

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    • I disagree

      Most firms deem stocks under 5 dollars to be unmarginable. This means that they will not extend a line of credit on investments that are trading at less than 5 dollars. They do not feel that a stock trading under 5 dollars is good collateral. Some set the mark higher or lower but 5 dollars is the most common. They do this because of the higher risk associated with lower priced stocks. Brokerages worry that they may not be repayed if substantial losses are realized in a short period of time. These facts make unmarginable stocks or stocks trading under the 5 dollar mark less attractive to the investment public including institutional investors and hedge funds.

      Sentiment: Buy

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