Direxion is reverse splitting LBJ 1-for-5 in early November. I don't understand why they are doing this right now. If LBJ rallies to $20 before the reverse split, it will be trading at $100 after the split. If Latin American stocks surge, LBJ could quickly reach $200 or more after the reverse split at which point Direxion would need to do a forward split.
I predict that Direxion will forward split LBJ within a year of the reverse split scheduled for November 2011.
It does seem premature to reverse split LBJ. Especially why 1:5, that is going to put the share value over 80. And cut down the volume a bunch, without volume why would traders even get in this ETF?? No volume = no trades.
Stupid decision. Maybe they will cancel this r/split.
Correct decision for us shorts. The tripe Index are meant for day traders and not for long term as they intrinsically are designed as cotango investments. Such investments contract with time makimng them ideal short candidates.
As they have fallen, we have to do many more transactions to make our Dollars. Its nice to see them consolidate byareverse split. Now for the same cost we get a bigger downside.