Why does XIN not make a reverse split? A 1:10 reverse split will immediately make XIN price at $36, a price most institution buys will find acceptable to get in for a little China exposure. Citi and AIG all used reverse split in the past and found their stock prices lifted by such a action.
I think Stan's idea (reverse split would be cheap and otherwise harmless) plus DoubleJ's point that attracting the interest of even a single Institutional buyer could mean a nice boost in share price make a decent case.
I'm not sure that's true. Frauds don't like to make any moves that might increase the scrutiny they're under. Since a reverse split would cause an increase in the number of guys like me and you examining their IPO documents and sniffing through their corporate structures, I think they'd specifically avoid a move like that.
Frauds thrive in the dark. Sunlight's the best antiseptic.
The idea that all of the institutions are licking their chops and have piles of cash to drop on a stock when it hits $5 is BS. Most institutions have restrictions about buying below $5, but don't assume that once we hit $5 intra-day, or $5 close or close above $5 for a week that multiple institutions will be buying hand over fist. On the other hand (I am a two handed economist) all we need is ONE with deep pockets and this could make another nice move at $5...
Let me ask in another way. What's the downside of making a reverse split other than couple of thousand expense? Even though a reverse split may have limited benefit, it still can help with very little cost.