BioSante's (BPAX) impending reverse split is a slap in investors' faces. I well remember when Cell Therapeutics (NASDAQ:CTIC) executed its own reverse split and I warned investors what was about to happen. Readers would be well-advised to read that fortuitous article. Unfortunately, I was 100% correct. Investors lost - BIG TIME!
Big Time Loss For Retailers
BioSante's investors are going to also lose big time. If you think differently, then you probably should schedule an appointment with your local psychiatrist.
Reverse splits, especially for biotechs at these levels are horrendous. But don't expect the company to tell you that; instead you'll read:
"The purpose of the reverse stock split is to raise the per share trading price of BioSante's common stock to regain compliance with the $1.00 per share minimum bid price requirement for continued listing of BioSante's common stock on The NASDAQ Global Market."
There is nothing meritorious about a reverse-split like this. Instantly, retail investors will see their accounts suffer, all in the name of staying on the almighty NASDAQ. I say, How about the AMEX?
What To Do
If you're still sitting on BioSante's shares at least you'll have a good tax deduction. For some, for years to come.
Just my opinion, but don't let the chat board hype or a momentary bullish head-fake fool you. Reverse splits like this can typically cost a retail investor another 30% loss. Ouch!
I advised Cell Therapeutics investors to run for the hills. I repeat that advice here. BioSante is like a toilet that won't turn off: that sucking sound is your investment dollars and I highly doubt management will apologize for causing your loss. Instead, all you'll hear is, 'How good it is!'
It Is Not Good, Not At All
If you think this reverse split is good, then you probably are on the management team at BioSante. It isn't good. Not at all.
Sometimes it's much better to take your losses and move on. After all, the money you walk away with can be better invested elsewhere. BioSante has earned no one's money... no one's... not retailer... not institution.
I wish I could be more positive, but I can't. I warned investors about Cell Therapeutics, I now warn investors about BioSante. Companies like BioSante deserve no one's admiration.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: Investors buy and/or sell at their own risk.