Reverse splits arent always reversals of fortune.Investors in battered technology shares have a new term to learn the reverse stock split.While investors spent much of last year tabulating triple digit percentage gains on numerous tech stocks, this year has provided a sobering lesson in the unique problems faced by stocks that slip below 5 or are even delisted from major exchanges.Now, along comes the reverse split, a mechanism that is increasingly being used to prop up tech shares at least temporarily that are languishing at gumball machine prices.Last month, for example, Planet.Rx announced its intention to conduct a 1 for 8 reverse split.Under a normal stock split, investors typically receive two shares for each share they hold, and the price is cut in half.For example, a person holding a stock worth 8.With a reverse split, the investor may receive just one share for each 1.For example, a person with 1,0.Reverse splits are typically used to keep a stock price at a high enough level, such as 1, that the shares are not booted off the Nasdaq.However, in many cases the higher price proves to be temporary as the shares once again slip into penny stock status.According to the Nasdaq, 3.What is Magnetic Ink Character Recognition What type of printer is required for MICR What is MICR What is MICR Toner Is MICR toner requiredHowever, 2.Pop.Mail. com. In August, Pop.Mails stock dipped below the 1 mark.To get its stock price above the 1 mark, the company announced plans to conduct a 1 for 1.Pop.Mails stock, which had closed at 3.Oct. Direct3d Acceleration Driver Free Download there. The companys shareholders, meanwhile, received one share for every 1.UDP Ports UDP 0 Reserved UDP 1 Port Service Multiplexer UDP 2 Management Utility UDP 3 Compression Process UDP 4 Unassigned UDP 5 Remote Job Entry UDP 6.Phone How to Reset an iPhone Passcode.Secure your Apple iPhone with a passcode a fourdigit number that you must enter before you can use the device.Reverse Phone Number Find Software For Printer' title='Reverse Phone Number Find Software For Printer' />But just 1.Pop.Mails stock was again under the 1 mark, where it remains.Since its done for purely cosmetic reasons and doesnt change a companys finances, the market knows it and the company gets penalized.Most companies end up seeing their stock prices continue to slide, said Pamela Peterson, a finance professor at Florida State University and co author of a 1.A further understanding of stock distribution The case of reverse stock splits.Jon Johnson, editor of Texas based newsletter Stock.Splits.Reverse splits have a negative stigma.A lot of investors we talk to dont have a lot of confidence in a company that gets its stock up through a reverse split.They think the company is playing games and trying to get credit for something they dont deserve, Johnson said.Whats the motiveBut for most companies in the current climate, a reverse split is conducted out of a need to remain listed on an exchange, rather than solely to prop up the share price.Companies that find their share prices fall below 5 or 1, depending on the particular Nasdaq category they fall into, receive a notice from the exchange that if their stock remains at that level for 3.Nasdaq spokesman Wayne Lee.If the shares remain at the depressed level for 3.At this point, companies have 9.Shares that are delisted typically move to the over the counter market, a market that is less liquid because it is more difficult to match buyers and sellers.Manual De Instrucciones Para La Wii Avec '>Manual De Instrucciones Para La Wii Avec .The Nasdaq allows companies to initiate numerous reverse splits, but its a double edged sword.While a stock price goes up following a reverse split, the number of shares outstanding contracts.Many institutional investors, for example, shun companies with fewer than 1.Greg Vogel, an analyst with Banc of America Securities.And if a companys Nasdaq float drops below 1.Lee said.For these reasons, many companies do not seek a reverse split.Its hard to make a case in doing a reverse split, unless you can argue there should be some reason for someone to buy the stock, said Tom Mc.Manus, equity portfolio strategist for Banc of America Securities.He added some companies may opt to avoid the effort if it appears theyll be closing their doors soon or landing a buyer, as was the case this week with Garden.Some companies, however, take the plunge anyway.Risking it.Care.Matrix, a retirement home operator, conducted a 1 for 1.September.Two months later, the company filed for bankruptcy protection.My impression is reverse splits are a strategy of last resort, said Neal Macneale, editor of the 2 for 1 Stock Split newsletter in Menlo Park, Calif.Although the markets this year pushed more than 3.Nasdaq listed companies to seek a reverse split, its surprisingly fewer than the number last year, when 8.Lee said.And through 1.Nasdaq did well, Mc.Manus said.
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