Time to consider the reverse split - for the good of shareholders
I saw in a SEC filing that when it had came up for discussion previously, it was decided not to do a reverse split of the company shares because there was the belief that it would be viewed as negative and result in a loss of shareholder value. Such thinking is prehistoric and it's now time to begin thinking about the reverse split in terms of how it will help create shareholder value going forward.
With the number of shares outstanding, for where Jones is currently, we need something between a 1 for 5 and 1 for 10 reverse split. There are too many shares outstanding for the size of this company. Part of the issue with so many shares outstanding, is that there will always be someone out there willing to sell lots of shares and it's difficult for the shares to move higher as a result - there's lots of churning. By reducing the number of shares, the stock can move more easily and we're likely to see more longer-term shareholders that aren't looking to flip in and out of a penny stock. With a higher stock price, as most know, we can get back to a more regular NASDAQ listing, and the shares would find its way into mutual fund portfolios.
As earnings and the stock price rebounds, management can always do a normal forward split of the shares when it makes sense.
Most everyone understands that a stock split, whether forward or reverse doesn't affect the financials or any of the ratios. However, there is the psychological component of the price the stock trades at. Just as people would prefer a share price of $25 as the result of a 4 for 1 split instead of the equivalent non-split $100/share, investors would show preference to a stock at $2 or $4 rather than 40 cents.
The primary driver for R/S would be relisting, but they are not interested in that right now as they save money by not being listed and are keenly aware of cost controL. Over time it can rise into your range if the turnaround succeeds.
Even without relisting, you have the psychology of it.
You and I both know that there is technically no difference between buying 1000 shares of a 40 cent stock if there are 30 million shares outstanding, or buying 100 shares of the same company stock if it were a $4 stock with 3 million shares outstanding. However, Average Joe investor doesn't know any better - just as he'd prefer to buy the $25 stock rather than the same exact company/stock if it were at $100 but prior to a 4 for 1 split.