Can look to Nephros (NEPH) as one example of reverse split
This is a pretty crazy stock, and in a somewhat similar field/industry as CTSO. Back in March 2011 they announced a 1 to 20 reverse spilt. On March 7th it closed at .60cts. On March 11th it was at .03cts. Bounced back sixty days later to .75cts.
This one takes investors ( gamblers) on some wild rides. Most recently popped from low of .41cts to $3.00 in April 2012 after gaining FDA clearance to market its Hemodiafiltration system. Only problem, not many are buying it- Tough to be in the dialysis filter biz-
I believe also popped from $2.00 to $30.00 back in April to July of 2009 when FDA approved the marketing & sale of a filter that removes biological contaminants from water & bicarbonate concentrate in hemodialysis procedures.
Common theme in these PPS spikes - The phrase "FDA Clearance & Approval"
Tony, What's all this flap about reverse splitting? Did Philip Chan indicate publicly that he was intending to do this, or is it just lack of public information about the Company's intentions that started all this?
No flap, just starting a topic of conversation thats been bantered about more often recently. I'm not a fan of RS, however it will be curious to see what measures are necessary to uplist. I'm confident they can find the $8mill+ needed to get through the next two years and completion of FDA trial. As mentioned in the last line of topic, the four words "FDA clearance & approval" seem to have the greatest positive impact on PPS- As another poster noted, see SRPT for outrageous example-
This is not directed at you, but it is a response to humoredpete that keeps asking if i would rather us have 800 million outstanding shares versus a reverse split. Putting aside the idiocy of authorizing 800 million shares and then turning around and doing a reverse split so you don't have 800 million shares, I would like pete to understand what that reverse split would do to a shareholder of NEPH.
Let's say a shareholder had 100,000 shares of NEPH valued at the 60 cents. The shareholder would have an investment in NEPH worth $60,000. Once the split was done a 1:20, this shareholder would have only 5,000 shares. In order for me to get back to my original investment worth of $60,000, the price of NEPH would have to be $12. 12 times 5,000 shares = $60,000. Since NEPH is now selling for 90 cents, the shareholder's investment is only worth $4500 and they are down $55,500 in their investment.
This type of scenario is all too common with reverse splits. In theory, all should be equal with reverse splits, but in practice this does not seem to work out especially with small upstarts. Personally, I would like to make a few bucks through an increase in sp before we start talking reverse splits. In order to do that, we need to start booking some serious sales. Book some sales and the price will take care of itself.
"poor", you do not lose the value of your investment on a r/s. Lets say you have 10,000 shares of CTSO at 10 cents a share, a 1 for 10 reverse split of that would yield you 1,000 shares at $1 per share. The amount of shares you have are less but are worth more. Making your original investment the very same dollar amount. You do not lose money on the reverse itself..