The R/S was authorized 6 months ago. Does anyone else think that the timing of the implementation right ahead of the RBS deadline means the news won't be good? As in Eagle knows the news would have sent and held the share price below the $1 threshold?
agree. recall their earnings release in march was a bit late in the reporting cycle...but now they seem to be motivated to move things quickly...as may 31 approaches. betting people might suggest that RBS has forced their hand in one way or another with the may 31 deadline serving as gallagher's wooden mallet.
It looks to me like there was little thought and no sound strategy as to the timing. They panicked and pulled the trigger as the pps trend was signaling a delisting notice soon.
Even the stocks that ultimately benefit from an R/S have the effective and following date dive. One of the most repeatable patterns in the market. So...
If the news was bad why not release it before market open to sequester the pps collapse. Separate negative events always multiply the downward trend ?
If the news was good why not release it before market open to provide support on a known bad day ?
If there was any strategy it would only be to drive the price down so the friends/family/VC plan would be most effective. This is a far less reactive way to entice any suitors with a case of cash to join in with discount terms. RBS can say little with this route.
Will SEC Rule 201 go into play and halt the stock since it is now down 10%? It's supposed to be an "alternative Uptick Rule, enacted in 2010" to curb the shorts. Righto. They can make 10% guaranteed every other day, drive a Co. into BK, and never have to purchase to close.
I think that is a reasonable thought tencjed. Another to consider is the language of the 2011 equity incentive plan. I believe as long as the reverse split was in effect prior to the shareholder meeting, then options based compensation would not change in proportion to the R/S. Had they waited, I think they would have been suject to the R/S. I think now the next step is to attempt to dilute, if anyone is even interested. Expect an announcment within days, just my opinion.....