Timeline for Can companies use reverse stock splits to liquidate my shares at unfavourable prices?
Current License: CC BY-SA 4.0
23 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Feb 22, 2022 at 2:25 | answer | added | Rick Colosimo | timeline score: 0 | |
| Jul 14, 2020 at 0:16 | comment | added | Acccumulation | @BobBaerker Just because someone owns a stock that significantly decreased in value doesn't mean that they're exercising zero risk management. I don't think it was too difficult to understand that's what I meant. | |
| Jul 14, 2020 at 0:10 | comment | added | Bob Baerker | @Acccumulation - Had I used the conjunction AND between my two statements then you might have a point but given that I used the conjunction OR, well then, not so much. | |
| Jul 14, 2020 at 0:00 | history | tweeted | twitter.com/StackFinance/status/1282827183069843459 | ||
| Jul 13, 2020 at 23:51 | comment | added | Acccumulation | @BobBaerker Just because someone owns a low value stock doesn't mean they're exercising zero risk management. | |
| Jul 13, 2020 at 19:07 | comment | added | Glenn Willen | I have turned my comments into an answer. | |
| Jul 13, 2020 at 19:05 | answer | added | Glenn Willen | timeline score: 8 | |
| Jul 13, 2020 at 18:53 | comment | added | MonkeyZeus | @GlennWillen Hmm, very interesting. I think your experience serves as a pretty good lesson in relation to the question. | |
| Jul 13, 2020 at 18:53 | comment | added | Glenn Willen | (Found the offer text -- search in page for "split" to read the text where they disclose the fact that they reserve the right (i.e. are actively planning) to use a reverse stock split to "involuntarily cash out" (their words) the people who acquire shares in the tender, and have done so in the past: sec.report/Document/0001493152-18-000227 ) | |
| Jul 13, 2020 at 18:48 | comment | added | Glenn Willen | @MonkeyZeus You can find a press release from LC calling the tender offer out as a scam (and giving an example of a similar past scam by the same company against a different target) here: ir.lendingclub.com/news/news-details/2017/… . The relevance to the present question, I guess, is that the scammer then uses a split-unsplit to forcibly cash out all the new "shareholders" of his "company" at a low valuation so he can do the scam agian. | |
| Jul 13, 2020 at 18:43 | comment | added | Glenn Willen | @MonkeyZeus This is getting off-topic and may get deleted, but: My recollection is they gave some headline valuation that looked favorable, but there were some other conditions which (after reading the fine print) would obviously not be achieved (and appeared designed not to be achieved), which would cause the actual valuation to be much worse. The stated purpose of the tender offer (to lobby LC about its business practices in some way) also appeared dubious and unlikely, considering how small the resulting interest would be, so I concluded the bait-and-switch valuation was the real purpose. | |
| Jul 13, 2020 at 17:18 | answer | added | Harper - Reinstate Monica | timeline score: 15 | |
| Jul 13, 2020 at 17:00 | comment | added | MonkeyZeus | @GlennWillen I'd be interested to know the monetary details of that tender offer and how it could look good on the surface yet stupid after investigation. Isn't math math? | |
| Jul 13, 2020 at 16:59 | comment | added | MonkeyZeus | If you think it's severely undervalued then buy 300 more shares. This sounds like penny stock gambling. It's not like they're keeping your money; you're receiving it to go gamble it elsewhere. | |
| Jul 13, 2020 at 16:33 | comment | added | Glenn Willen | (It was these guys, although I believe they made multiple tenders for LC and mine was a later one: crowdfundinsider.com/2017/08/…) | |
| Jul 13, 2020 at 16:31 | comment | added | Glenn Willen | If you're not careful, sometimes the junk penny stock trades you. (I one received a tender offer for my shares in a public company, which on the surface looked quite favorable, but which after investigation was clearly stupid. The company making the offer had apparently done this split-unsplit procedure several times in the past, to cash out shareholders it had gotten as the result of past scummy tender offers. I was surprised the offer was allowed, honestly.) | |
| Jul 13, 2020 at 15:43 | history | became hot network question | |||
| Jul 13, 2020 at 11:01 | comment | added | Bob Baerker | If your stock's share price is 50 cents, you have a much bigger problem than the reverse split. You either bought the stock at a much higher price and employed zero risk management or you're trading junk (penny stocks). | |
| Jul 13, 2020 at 10:47 | answer | added | mhoran_psprep | timeline score: 21 | |
| Jul 13, 2020 at 10:32 | comment | added | TripeHound | @mhoran_psprep Interesting. I'd never heard of that being done (not that I've gone digging in that area). | |
| Jul 13, 2020 at 10:28 | comment | added | mhoran_psprep | @TripeHound After the reverse split they then do a regular split to get back to a low share price, then they get delisted, and go private. sgbonline.com/… | |
| Jul 13, 2020 at 10:13 | comment | added | TripeHound | I don't know if there are regulations in some countries over the size of stock splits / reverse splits, but in practical terms, a 1000-1 reverse split would take the price of a new share to $500 which seems very unlikely. Do you have anything more substantial than "I was told..." that this is why companies reverse-split? If so, please edit it into the question. | |
| Jul 13, 2020 at 7:12 | history | asked | Flux | CC BY-SA 4.0 |