Seeking Alpha
  • tenax
    whoa. LVLT popped there for a second!
    10/5/11
    Reply (8)
    • Daniellem31: What does a reverse stock split mean? Good or Bad?
      10/5/11
    • tenax: to my understanding, it means institutions will now be buying the stock as it's over 5.00 (based on today's value..would be $30 stock)
      10/5/11
    • tenax: i believe companies do it as well to show investors we're not a speculative penny stock any more. that can backfire though. more..
      10/5/11
    • tenax: look at what happened when C tried to do that. stock just collapsed further. i think this is a good thing for LVLT and investors though
      10/5/11
    • Crunching Numbers: A reverse split (or regular share split) should be neutral. The value of the company based on discounted cash flow, P/E or EV don't change.
      10/6/11
    • Crunching Numbers: Whatever problems were there before, still there. Psychologically for customers, higher share price indicates more stability.
      10/6/11
    • Crunching Numbers: Can now be purchased by some funds/pension plans that have $5 minimum share price.
      10/6/11
    • tenax: I agree it should be neutral, Crunching..but also agree it's psychology. perception it's now a "more valuable" stock than before @ new price
      10/7/11