Stock Split

[demarpaint]

Tesla was a great example of $$$ pouring in after split.

Yes. Do you remember AOL back in the day, with the splits and run-ups?

 

[bdcardinal]

Sorry typo, $1.35/share. I have 2,000 now after the 10 split. Now if only my Ford stock had fared as well.

 

[JavierH19]

The company I worked for did a 15-1 reverse split.
The market analyst called it a move of pure desperation..... and appropriate!!!

The only time a reverse split it done with good reason is if it's below the $5 threshold or it gets delisted although some companies stay under 5 for far longer than the 1 month I think the limit is. And that's why anything at or below 5 is considered a penny stock and some get delisted.

 

[KJSmith]

The only time a reverse split it done with good reason is if it's below the $5 threshold or it gets delisted although some companies stay under 5 for far longer than the 1 month I think the limit is. And that's why anything at or below 5 is considered a penny stock and some get delisted.

It was near or under $5.
They still declared bankruptcy.... with 1 Billion dollars cash in hand.
Then they got permission to skip the pension payment.
Did not affect Executive pay.

At some point they took taxes out of my check for the alleged value of the stock.
I never tried to exercise the options
Just not wort the hassle.

 

[demarpaint]

The only time a reverse split it done with good reason is if it's below the $5 threshold or it gets delisted although some companies stay under 5 for far longer than the 1 month I think the limit is. And that's why anything at or below 5 is considered a penny stock and some get delisted.

GE did a reverse split which seemed to workout OK. Many don't.

 

[JavierH19]

It was near or under $5.
They still declared bankruptcy.... with 1 Billion dollars cash in hand.
Then they got permission to skip the pension payment.
Did not affect Executive pay.

At some point they took taxes out of my check for the alleged value of the stock.
I never tried to exercise the options
Just not wort the hassle.

That's odd. What company was it, I wanna look into what happened just out of curiosity.

 

[KJSmith]

That's odd. What company was it, I wanna look into what happened just out of curiosity.

Frontier Communiations

They bought three states from Verizon (land lines).
I think around 2016,
The original CEO apparently didn't agree with the purchase (rumor) and left the company before completion.
They paid 10b for Fl, Tx and CA. TX and CA usually made money....FL was a horrible mistake.
They tried to auction it once and couldn't get a qualified bid.

Stock dropped from day one.
It was probably around 2020 the declared bankruptcy.

Interesting process to watch from the inside.
CEO McCarty just stayed on message. keep doing your work.
They hired his replacement a few months before bankruptcy.
Fired McCarthy, I'm sure he got paid. New guy handed out ~50m in retention bonuses to keep the talent (the ones who ran us down).
So, they all got paid. He was CEO for about a year... common practice from what I had read.
Led us through the bankruptcy.... then was replaced (I'm sure he got paid).

New CEO came in and replaced all the talent that got bonuses.

I was watching the stock analyst describe everything that was going to happen about a month before it did.

They had sold some properties in the NW right before declaring...that process takes about a year.
Getting all the approvals to go bankrupt took about a year. I can't remember if it was 7 or 11.

Anyway, it all worked out together and they ended up with a Billion cash and even way more in credit at the end.
I think they shook 10 or 11 billion off their books.
Started spending money like drunk soldiers.

I retired on 3/22. They had not caught up on the pension payments when I filed.
About a week before retirement a buddy called and told me that they had gotten an email saying we could get our lump sum.
They rejected all my paperwork on 3/1 and I had to refile.
Worked out for me thankfully.
They caught the pension plan up because they wanted to offer packages.
No one would take a package without the lump sum.

 

[Dave Hess]

Sad the executives can destroy a company and still get guaranteed Golden Parachutes.

 

[KJSmith]

You can imagine my laughter right now as Verizon has announced it is buying Frontier.
What a tangled web has been woven.
That rumor started just a few months after Frontier bought us.
LOL.

If I was a gambling man.....and much younger..... I would look for Windstream to be bought next.
They did a better job building out their fiber network.

A lot of this is being driven by the Government plan to put fiber to every home.
Lots of assistance dollars out there to be had.

 

[mjk1967]

Question for BITOG investors.

I own some stock in a major pharmaceutical company. The stock price is approaching the point where a probable split will happen. Understand this gives the investor twice the shares at half the price so no actual gain in value. So what should the investor do, buy more at the lower price, sit tight or sell the entire lot? My crude analogy; If you want to catch rain water is it better to have one big bucket or two half sized buckets?

Any experience with this situation?

I've been through 3 splits - 2 with Apple, 1 with Nividia.
From my viewpoint, the stock typically is going to have a potentially wild ride after the split - run up, then sell off (repeatedly). I wouldn't expect big moves to the upside, at least for a handful of months.

I don't see big upsides with splits, and don't believe the theory that 'it allows people to get into it, that couldn't afford to before'. Retail doesn't do squat to a Fortune 500 stock.