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Cereplast, Inc. Message Board

  • brucele2012 brucele2012 Feb 14, 2013 10:30 AM Flag

    anyone tell me opinion about reverse split?

    i want to buy this stocks more.. but reverse split is in the way.. what should i do?

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    • Well, first of all, a VOTE on a potential R/S is on the way. The last vote (last quarter) was voted down.
      I personally don't like R/S because they 1) give the iimpression of a lack of confidence for the stock to rise on its own and 2) they usually result in a reduction in overall share value in the time following that split.
      You really simply have to ask yourself if you think the FUNDAMENTALS of this company will improve within the amount of time you are ok with your money being tied up in this investment. If you think CERP can take advantage of the environmental movement (i.e. the recent law passed in Italy and being discussed in other areas) then it really makes no difference whether or not there is a reverse split--as the share value should rise based on if CERP starts selling more product. If CERP cannot be profitable, then the share value will likely decrease based simply on that.
      REAL news (or a lack thereof) is what is going to move this stock. I think we have already seen the result of the Italian law--the share price appears to be levelling at the $0.04 range. I am hoping for some news on increased sales in the coming months--and I am RISKING my money hoping for that. Lacking such news--this may become a loser for me.

      Sentiment: Buy

    • Bruce -

      Many times companies try to get approval for a RS in case they would need it in the future.

      A couple of companies that I know which had it approved, later elected not to do it.

      Recent examples are ACTC and I belive NBS - CTIC did that also years ago..

      If this stock get to be over or clse to $1, it will most likely moves higher nad there will no need to RS.

      Sentiment: Strong Buy

    • Read the proxy, there is no reverse split approved they are asking for it to be considered to get the stock over $5 so the big funds can buy in which is good in this case read the proxy or dont post

      Sentiment: Strong Buy

    • The majority of the time a reverse split will produce a share price equivalent reduction of about 20%. This does not have to be forever, but most of the time this price drop will occur. So you have to ask yourself if quickly bringing the price up over a dollar is important. It may be that we are so far away from a dollar that the split makes sense. Personally, I don't like to see companies that are closer to a dollar split, as it usually indicates desperation and the company ultimately fails anyway, (see Satcon as an example).
      But perhaps with shares at a nickle we are so far away from $1 that a reverse split is a good idea.
      You asked for opinion, and that is all this is.

      Sentiment: Hold

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