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CTCH Reverse Stock Split

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December 17, 2007 – Comments (2) | RELATED TICKERS: CTCH

CTCH has decided on a 1 for 3 reverse split.

Can I get some people more knowledgeable than I to chime in on this?  For what reason would they decide to reverse split?  What do they gain from this move?

I own some CTCH, and it's done well for me so far.  Is this a warning sign?  I can't find any solid reasons anywhere online (company website, news sites) for doing this.  Are they just trying to be a more attractive higher priced stock?  Or are they in danger of being delisted if they're not above $5?  

Anyone?

2 Comments – Post Your Own

#1) On December 18, 2007 at 12:50 AM, StockSpreadsheet (65.49) wrote:

The NYSE will delist you if your stock doesn't stay above $5.00 a share and your market cap doesn't stay above a certain level.  The NASDAQ also has similar rules, but I don't know what their minimums are.  Every time that I can think of that I have heard of a company doing a reverse split, it was always to keep their stock from being delisted due to the stock price being below the minimum price allowed and still maintain its listing on either the NYSE or the NASDAQ.  So I would bet that this is the reason that this company did it also.

Craig 

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#2) On January 11, 2008 at 5:41 PM, zygnoda (24.35) wrote:

They are doing it so they can be more attractive to institutional investors.  Revenues are growing and they have inked deals with major companies.  I think it's a good idea.  The stock was a "penny stock" and they wanted to make it more attractive to those investors.  It is just another step toward making me rich. ;)

http://biz.yahoo.com/bw/071101/20071101005663.html?.v=1

"Following three years of accelerated growth and in anticipation of our continued expansion, we are looking to increase our visibility and accommodate larger institutional investors," said Gideon Mantel, chief executive officer and chairman of the board.

The reverse stock split is intended to enhance the acceptability of the shares for those institutional investors. These institutions have expressed interest in the company, however they generally invest only in companies that meet certain requirements. These requirements include a minimum $5 bid price and/or listing on the NASDAQ Global Market.

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