Hello,
I noticed that Capstone recently had a reverse split of 20 to 1. We
had multiples of 20 now we have only a handful of stocks. Is there
any hope for this kind of split showing a profit? And we were
assessed a "reorganization charge"! Is this charge common?
Laurie Frederiksen on
Hi,
This news release from CPST details the reasons for the reverse split:
Your investment club, as shareholders, needs to determine whether or not you think this action will enhance the value of the shares you own.
To do that, you'll need to understand how the company makes its profits, how successful it has been at achieving its mission, what its prospects are, how effectively it is managed etc.
Perhaps there are others who participate in this list that might be
following this stock also and can provide some thoughts their clubs have
had about this company as an investment.
These are the same things you need to analyze whether or not there has been a reverse split. There's always "hope" an investment will pan out. It's up to you to know enough about the company to decide whether or not the chances of that "hope" turning into actual success are worth waiting for.
Reorganization fees are regularly charged by some brokers.
Hope that helps.
Laurie Frederiksen Invest with your friends! www.bivio.com
Hello,
I noticed that Capstone recently had a reverse split of 20 to 1. We had multiples of 20 now we have only a handful of stocks. Is there any hope for this kind of split showing a profit? And we were assessed a "reorganization charge"! Is this charge common?
Mark Eckman on
CPST is doing this to maintain their listing on NASDAQ. All the exchanges require stock to trade above a set dollar value, usually $1, or the exchange will remove the stock from trading. So, this is a move to maintain a position in the market. It has noting to do with the market value of the investment. But it speaks volumes to management's appreciation of the situation.
Hello,
I noticed that Capstone recently had a reverse split of 20 to 1. We had multiples of 20 now we have only a handful of stocks. Is there any hope for this kind of split showing a profit? And we were assessed a "reorganization charge"! Is this charge common?