My 129,000 shares turns into 4,300 shares... That's #$%$. I'm never going to make a dime off this stock. And not to mention if it's a 1 to 100 reverse split... That will turn my shares into a measly 1,290 shares... Never putting another dime into this stock or another penny stock ever! I've learned my lesson. What do they think a reverse split will do? A $5 price tag doesn't change anything about the company... just screws us small guys. Thanks!
You fail to understand the relationship between market cap and business and the relationship of that number to the number of shares and the share price pre and post r/s. Until you learn to comprehend the dimensions and relationships between these numbers, you will have a lousy understanding of just how rich you can become with 4,300 shares, if the company's technology pans out and it receives FDA approval (which seems a good likelihood, at least from what we know so far). There is no difference in terms of opportunity at this stage. All that is lacking is your ability to comprehend reality. Apparently, you're not alone. This means someone else will eat your breakfast. I'm sorry to hear that, but that is the reality. It's really simple math.
Personally, I'm expecting possibly a r/s of 100 to 1, so you'll have even fewer shares. Even then, it won't matter. If you can't understand the relationships of the different numbers to the basic multiples, you are lost and it's going to be very hard for you to comprehend what is going on, at all.
I think that the BEST CASE scenario is to sell the company BEFORE a RS.
Considering the technology, a $5 Billion buy-out is NOT unreasonable and I suspect would make most everyone happy!!!
That would be a loss from my estimation. This company is well worth many times more than 30 billion if it gets approved and if, as I expect, it gets breakthrough status. Anyone who can't understand that, shouldn't be here. It could also blow up worthless, because the technology doesn't work for some reason. Though I don't expect that or I wouldn't still have my shares 100%.
We are not purchasing dividend paying Fortune 500 securities. We are funding the initial phase of a bio-tech company that is working with cutting-edge processes that may or may not succeed. If they nail it we stand to be rewarded handsomely for our foresight.
Never again in our lifetime will we be able to participate in medical processes with such huge implications for mankind. Essentially we are the VCs providing embryo-stage financing. Sure, we don’t have the dilution-negating options granted to insiders, but on the other hand we can buy at very attractive prices at any time we desire and maintain relevance.
Seeing as how we are embryo-stage investors we can do as the options granted insiders and exercise our belief in the processes, and company, by buying more shares. It’s called staying in the game when the “call” is made. In fact, the “true believers” can even double-down, or more, on their hunch and taste unimaginable rewards for extending risk capital. Or lose it all. But that's the game with bio-tech and this company in particular.
Sure, a potential 1/100 reverse split is in the works and makes complete sense in moving the company from where it is to the next level. But keep in mind, splits can go in the other direction, as well, especially when the product or service is successful. Two or three rounds of 2/1 splits isn’t unimaginable and is a healthy dividend for the faithful.
So place your bets or fold, but stop complaining. If you want security buy IBB; they have a nice portfolio of ~80 bios.
Ted, very good post, but I have a different opinion about some of it:
"We are funding the initial phase of a bio-tech company"
Sure ACTC is a penny stock, but the comany has been around for almost 20 years and still hasn't a revenue stream. Essentially it's a welfare momma, using other peoples money to survive. And it's about time it stops suckling off it's shareholders, and instead produce some results. Interesting that CEO and Dr Lanza keep getting pay raises, eventhough they've produced nothing of significance yet.
"Never again in our lifetime will we be able to participate in medical processes "
Come on, there's plenty of opportunities out there for ground breaking new medical cures, in fact, venture capitalists are always looking for the next great thing to put their money in, ever wonder why they haven't put money into ACT?
"Seeing as how we are embryo-stage investors"
As I said ACT has been around for almost 20 years, thats adult stage, not embryo stage. Personally I've owned shares for almost 2 1/2 years, and thats not an embryonic stage either.
"Sure, a potential 1/100 reverse split is in the works and makes complete sense in moving the company from where it is to the next level"
I don't agree with that, because if ACT remains in it's current finanical state, which is no revenue stream and just just burning cash, then after they do a RS of 1/100, there will people out there who love shorting weak stocks, and they will wreak havoc on ACTC, returning it once more to a penny stock.
"So place your bets or fold, but stop complaining."
Railing against a WS shyster who's running ACT like it's his own personal fiefdom is not complaining, it's rebelling against someone that dosen't have the shareholders best interest at heart.
I have lived through reverse splits before, and what has happened in each case is not only did I of course receive less stock but the price dropped because regardless of the company's technology and its potential it had no earnings, and evidenced low liquidity, making it over priced after the reverse split. In situations like this as it is especially with ACTC; it has all expenses and has zero earnings, raising " toxic" capital will require a re-dilution in order to entice investors. It will empty its stock treasury in order to stay afloat. The person who held their 129,000 shares, will more than likely see a 100 for 1 reverse split, and over time see his stock literaly drop down to below a $1.00. But, given time and an FDA approval, I believe you will see the stock go over $100.00 per share. What it offers to the market is huge, it is that a shareholder needs to quit following this stock, put it in a drawer and wait it out. I blew it once on a pharm company. I held onto the stock for years and finally when needing cash sold it at about $1.50 per share. 2 days after I sold it, the FDA gave it approval and the stock went to $13.00 in one week and continued up that same year to I think $64.00 a share. Its been many years, so I may be off on its high point. Regardless, that is what happened. It was Noven Pharmaceutical. They were the inventors of the transdermal patch and other medical delivery systems. Everyone, if you believe in the company's technology and ground breaking medicine and the potential upside, then just wait it out. This investment was never meant to be an overnight windfall. It will take another few years for all the pieces to come together.
I do, yes, but the magnitude that a price increase affects my shares decreases drastically with a reverse split. Like I said in a reply to another guy, to reach $1,290,000 with my current shares, the stock needs to go to $10... A reverse split of 1 to 100 means the stock will need to hit $1,000 a share to get the same $1,290,000 return. It's pretty obvious which one is more likely to happen... 06 to $10 is very possible. $6 to $1,000, not a chance...
What you lose is potential gains,,, If the stock goes up a buck when you have 12900 shares you make 129000 dollars,,, If the stock goes up a buck when
you have 1290 shares you make $1290 bucks.. Yo have lost the potential gain. The same $7800 dollar investment now returns 100 time less for the same amount of capital risked, SO I ASK YOU,, why would you invest 7800 in a company that makes NO money only to see a 1290 return???
REVERSE SPLITS are just stealing from the small investor,, it's that simple.
They'll let you make the 1200 bucks but not the 128,000// If you don't get this math, then you simply shouldn't be investing....