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Muscle Pharm Corp. Message Board

  • felipe.cersosimo felipe.cersosimo Nov 18, 2012 2:10 PM Flag

    On Reverse Splits

    Regarding Muscle Pharm Corporation's (MSLP) apparent desire to do a 650 to 1 R/S, one should keep in mind that reverse splits are usually a sign of good things for companies on the way up.

    Using a reverse split to raise the share price and obtain an uplisting is a very positive sign for a company and is much different than companies that use a reverse split to prevent being delisted. Once again, the confusion relates to delisting as opposed to uplisting.

    Many people who don't focus on uplistings only encounter reverse splits in the context of companies that are trying to stave off a delisting, so in many people's eyes a reverse split is a sign of a troubled company.

    For the relative few of us focused on uplistings, a reverse split is typically the first catalyst that attracts attention to the potential uplisting and is considered a very good indicator.

    Cynics will argue that I'm only highlighting the exceptions to the rule, and that's fair. They aren't the only companies to beat the market since declaring stock splits, but there are far more losers than winners after going for reverse split makeovers.

    A company declares a reverse because its share price is unacceptably low -- and that doesn't happen by accident. There are plenty of companies declaring desperate reverse splits on the way to zero.

    However, that was going to happen with or without the exchange adjustments.

    Sentiment: Buy

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MSLP
13.61+0.01(+0.07%)Oct 22 3:56 PMEDT

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