I say reverse splits have been, are now and always will be for stocks that are losers and I don't think CMGI qualifies for that label. This company is restructuring and seems to be recovering rapidly in spite of a lousy economy. I say let it go as is and I think the stock will recover without the necessity of a r/s. I know some of you people will point out the exceptional stock which has succeded with the r/s but if you do a thorough a research you will find many more instances in which it was the KIss of Death. We don't need it now and I don't think we will need it to maintain the Nasdaq listing long term. No need to rush any decisions at this time.
If you think reverse splits are good take a look at some history. All the ones that I have been involved in have lost me a lot more money after the split. Perhaps reverse splits are not only a sign of weakness, but also indicate that the Company is on the ropes.
The most recent reverse split that has happened to me is RAZF. Take a look and see how well that worked. A real disaster for shareholders. If CMGI splits, I will wait for the price to drop substaintially before buying any more.
Fully agree, rs is mostly painful for investors. But again, why should management care? Do you really believe they care about the money of small investors, even if they could? And in that current situation, do they have a choice, even if the would care? I answered that 2 questions to myself and the outcome is - they will do rs.
1. A reverse split will cause a lot of people to lose a lot of money. 2. say you have 5000 shares at a cost of $25.00--A 10 to 1 RV will give you 500 shares at a cost of 250.00. 3. Which is easier to make $25.00 or $250.00. 4. I believe CMGI will within the next 2 or 3 years go beyond the $25.00 mark But will not for a LONG time ever get back up to $250.00 5. Nuff said from me.
You are right, many people will lose a lot of money - but why should management care about those guys? Pushing the price up will attract fund managers and short traders. Less shares will also lift the number for "earning per share".