All of this talk about companies dropping further after a reverse split makes no sense for DVAX. Most companies doing a reverse split are in decline and hoping for a turnaround. That is in a completely different category.
GM declined and went totally bankrupt.
Citi did a reverse split. And like Blackraven said, RBS had trouble, but the whole banking sector got crushed because they were in a bubble, and they had bad mortgages and bad paper on their books from real estate which was also in a bubble.
Kmart and Sears went into decline and were bought out by a company that just keeps selling off their assets.
None of these are like DVAX whose main product is a leader in its field. The company's problem is not tied to more sales or better marketing. It is tied to one thing--FDA approval. If we get FDA approval, the pps will rocket. If we fail to get approval, the pps will tank. It's that simple, and many of us know exactly how that works because we have been through it. We have been smacked down a couple of times, but not because the drug is not good. The FDA and the panels have agreed on the efficacy. It is the study that has held us back. We have a new study going on that the FDA has agreed on. We won't even have to go before another panel unless a serious problem develops.
In conclusion, we cannot compare a DVAX reverse split with all other reverse splits because we do not fit into a one size fits all grouping. If the stock takes a smack because of a reverse split, I will put my money where my mouth is and buy the dip.
DCTH (Biotech stock) just did a 16:1 reverse split in April of 2014 the day of the split the stock sank 25%. I haven't been following dvax. I personally love DVAX for what's to come when it gets FDA an EMA approval. So I guess it's been confirmed that DVAX is going to do a Revers split? Why is it doing a RS?
To shrink the precious float levels. That's why.
Then they can go right back to doing those fabulous cash for shares deals so that they can (in turn) pay out those lovely incentive programs for such marvelous performance we've been seeing these last 3-5 years......
A more recent example of a company that could use a reverse split is American Apparel. Last August they were trading in the $2 range, but today they trade in the 50 cents range. They are a declining company in need of a turnaround. A decision to have a reverse split (or not) has no bearing on whether they meet their monthly sales target. They are already having problems.
DVAX is completely different because it is a company just getting started. Like I said before, they just need approval, and their shares will take off the day that happens.
APP is a different case than DVAX, I will stipulate that.
APP has apparrel to sell, and DVAX does not.
DVAX does not even have fried chicken OR cough syrup to sell.
Like a Monty Python movie, DVAX has "NOTHING for sale"; and quite honestly, that should be scary to you.
Because, without anything to actually sell and generate income, they will most assuredly resort to dilutive financing in order to get something to spend.
More dilutive share deals leads to a re-expansion of the precious float. That is the marvelous forward thinking of the illustrious management.
Have you seen APP's website? Almost peddling child porn pictures to draw customers!
In the underwear pictures, I can clearly see areolas and nipples and bush. And those little girls they are using have to be BARELY legal. Hard to imagine that they are going broke peddling that, but hey.
Maybe DVAX management could learn something from APP; after all sex does sell.
RAD had bad years but survived because they had stores full of merchandise to sell. Maybe APP will do the same. "One war at a time", as Mr. Lincoln said. APP is not my business or concern anyways.
DVAX has more than enough problems and too few resources at their disposal. Having something to sell and the respect and confidence and backing of the investment community at large, would be a big help also in this. But I really think that the investment world doesn't see DVAX getting Heplisav done successfully by this point. Otherwise there might have been more positive backing of DVAX the other day when they announced the new P3 trial news.
But heck; who knows? Anything can happen in this crazy investment world......