Looks like the market likes the RS to me because ACI is barely down. Simply the initial knuckleheads selling on fear. It's the same thing with ANR, they only wanted the big boys in the stock, so they took it down this morning. Too bad for them because I was waiting with buy orders!
Yes, I've been an ANR long for a very long time but I have admitted many times over that I have been trading this stock. It has done very well for me and it will continue to do so in the future. The talk of BK is simply ridiculous.
The reason for a reverse split is that a higher price and reduced float will result in broader institutional ownership and less speculator ownership. A secondary benefit of a reverse split is that by reducing the shares outstanding and share float, the stock becomes harder to borrow, making it more difficult for short sellers to short the stock.
It appears you have no clue to back up what comes out of your mouth.
If a company has 100 million shares and is trading at $1 and they perform a 1-10 reverse split, the stock's price will be $10 per share and the number of outstanding shares will be reduced to 10 million. The value of your shares remains the same! I should have know you had very little knowledge of what you are talking about when I saw your comment on delisting. Thus, although the number of outstanding shares and the stock price changes, the market capitalization remains constant.
The reason for a reverse split is that a higher price will result in broader institutional ownership and less speculator ownership. A secondary benefit of a reverse split is that by reducing the shares outstanding and share float, the stock becomes harder to borrow, making it more difficult for short sellers to short the stock. The limited liquidity may also widen the bid-ask spread, which in turn deters day-trading.
I owned CDE when it performed a 1-10 reverse split. After the reverse split, I tripled my money. Reverse splits may get a bad rap on Wall Street but that's mainly from shorts because the company is fighting back!
ANR has by far the best cash to debt ratio of ANR, ACI, BTU and WLT. Only CLD is in better shape being cash flow positive with little to no deft. It's the very reason I own more ANR shares than any other coal company.
The only reason to own some others is that these stocks normally follow each other up or down regardless of the facts. The media wants people to think BTU is the best of these coal companies, but people are obviously not looking at their numbers!
The only positive I see for BTU is that they are likely to be the first to realize an Asian recovery.
I see you likely own both companies too. That's why I posted on both ACI and ANR boards. I'm still hopeful that ANR takes the high road. Good Luck!
If you want to increase shareholder value, by retiring shares at ridiculously low valuations, seek approval of a share repurchase program rather than a reverse split. Of course I understand that it's simply approval and not implementation of a program, but the share repurchase program is looked upon much more favorably than a reverse split.
That is exactly why I shot a message off to ANR IR as soon as I received email notice of ACI's plans. I know that companies in the same situation are likely to follow the lead and I'm hoping ANR takes the high road. If the company desires to retire shares at these ridiculously low levels, then simply sell RICE shares and repurchase ANR shares. My hope is that we announce a share repurchase program rather than follow ACI.
I only have 20k shares of ACI and 25k of WLT. All of those shares came to me free, courtesy of my much larger holding of ANR. Now that I look back, I should have simply reinvested the extra money right back into ANR.
If the company seeks authorization from its shareholders, in an attempt to increase shareholder value, authorization for a share repurchase program is the route to go.
Ben, I know this is the same as announcing a share buyback program, but it's not looked as favorable by Wall Street as a repurchase program. The company buys back shares at ridiculously low valuations and retires those shares. It's usually followed by the events you described such as secondary offerings.
Regardless, it doesn't state the company will implement the reverse split if it's approved. My theory is that if you're planning to use this process to increase shareholder value then you need to announce a share repurchase program versus the reverse split.
I've seen stocks triple after reverse splits (which would get to that $30 level again) and I've seen them come right back down to previous levels. I shipped off an inquiry to Alex as soon as I learned about Arch's plans, I'll let you know if he responds.
Ownership is as of today 2/27/15. This right from the Pre 14A: Authorize the Board of Directors of the Company to effect, in its discretion, a reverse stock split of the outstanding and treasury shares
of common stock of the Company, at a reverse stock split ratio of either 1-for-5 or 1-for-10, as determined by the Board of Directors, and approve a corresponding amendment to the Company's Restated Certificate of Incorporation in the form attached to this Proxy Statement as Appendix A (to be filed if the Board determines a reverse stock split ratio of 1-for-5) or Appendix B (to be filed if the Board determines a reverse stock split ratio of 1-for-10) to effect the reverse stock split, subject to the Board of Directors' authority to abandon such amendment
I just received my notice of ACI's annual meeting on 4/23 and the above proposal for the 1-10 reverse split is being asked by that board.
Please ANR do not follow suit! I like my 100k shares and do not want 10k shares at $10. Thankfully I don't own nearly as many shares of ACI as I do ANR. I much rather this company repurchase shares at these crazy low valuations than propose a reverse split like ACI.
The notice of Annual meeting with this proposal just hit the streets.
Say what, they just purchased! Why do you think the stock jetted up into the close. The company released and insider purchase, but for phatom stock. I didn't have time to look that up yet though.