- Sep 29, 2000
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Normally when a company reverse splits, they keep the market capitalization the same, so if you had 100 shares at $1.85/piece now they are worth $185/piece, you just own 1/100th as many.
However, in this case, if they do the 100:1 reverse for existing shareholders, but then also increase the number of shares elsewhere, it's akin to just wiping out their common stock and starting anew with a fresh IPO, kind of, isn't it? Hell if I know. Hence my post!
In a filing with the SEC late this afternoon it was disclosed that the GM "restructuring" would:
Increase the number of authorized shares to 62 billion (!)
Reduce the par value to one cent.
Effect a 100:1 reverse split for the existing shareholders.
Normally when a company reverse splits, they keep the market capitalization the same, so if you had 100 shares at $1.85/piece now they are worth $185/piece, you just own 1/100th as many.
However, in this case, if they do the 100:1 reverse for existing shareholders, but then also increase the number of shares elsewhere, it's akin to just wiping out their common stock and starting anew with a fresh IPO, kind of, isn't it? Hell if I know. Hence my post!