and MsRusso said they will be taking a vote "from shareholders i believe" to have the option to do a reverse stoct split.........question,would that not wripe out shareholders equity even if's its a smaller reverse stock split ?
Pat Russo would have to go first and without her very lucrative severance package. I agree that this is currently a stock to stay away from. So does the street which is why I believe the R/S will have no favorable immediate effect. A raid on the shareholders to restore the negative net tangible assets is not good.
Cramer also forecast 6 cents for the quarter, si I don't give him much credibility. Real problem with LU is the negative net tangible assets http://finance.yahoo.com/q/bs?s=LU&annual as you can see from the financials. I reckon the best medecine would be a RS PLUS an injection of funds from the shareholders. In the long run it would be worth it. In the short run, LU was mentionned in the new year list as a stock to steer clear of.
You are correct.
The rub comes, when a company expands their total share count before a reverse split, and the BOD authorizes bonus pacs for the management team that include free stock. The act alone casts off the image of a management team that is out of control and completely disconnected from the shareholders. The problem is that by doing this they have limited "only themselves" from any potential negative effect that could happen as a result of the reverse split. Pat, the BOD and the various committees, which are made up from the same group, are operating below normal ethical standards. As a consequence, it may in all probably keep institutional investors away for 12 -16 months after a reverse split or at least until they have restored credibility and are able to adequately covey it. (It will be a real dead stock if they r/split it now.) The best way to restore credibility is to remove the threat of a reverse split. Start a share buyback program to reduce the shares outstanding and give back unearned bonuses. (for comparison look at JNJ�s ceo�s compensation package vs. its performance and stock price.) Lucent has until 16 February to r/split the stock, and they may exercise that option if they feel the option won�t pass at the shareholders meeting. Because we finance their forays, the 12-16 month dead-time is nothing to them since they are already being compensated ahead of creating any shareholder value and a decent pps. A company with all these resources - and so-called talent - that can't get their share price above five bucks without a R/S; SOMETHING's WRONG in tune town.
You can help by voting NO to the reverse split and yes to all the shareholder proposals, which are quite frankly better than any of the BOD's proposals. An R/S will probably not cure anything at Lucent. They have got to do it within and from their own character. It�s integrity that counts in this game.
Ok what a reverse split would do lets say LU is trading @3.20 , a 2 for 1 reverse split would make 2 of your shares become one at a price of 6.40...
Are you still with me children ...
Now lets take a look at a 10 for one split with LU priced @ 3.20--ten of your LU shares would become one share at a price of 32.00
The big boys at LU may not care for a reverse split because many brokerage houses will not let a stock trading under 5 dollars to be sold short.. And also the Fed Reserve regulations will not let a stock trading under 5 dollars to trade on margin long or short...
This is puzzling, I thought a reverse stock split was the oposite of what your are saying. If you have a 100 shares and say it was 1 for 10 reverse you would 10 shares at the end of the day with the same value in dollars not including up or down of the market for the day. Each share would price would be higher with no trade action from stock market. Lucent would a lot less shares floating around to everyone.
if you reverse split a $3.32 stock 3 for 1 you have a $9.96 stock which an institution may have an interest in and may be within the parameters of their corporate bylaws. It has everything to do with it.