Apr. 23 at 4:44 AM
$OCGN
⢠A reverse split (RS) can be used to âclean upâ the shareholder base.
⢠It often shakes out retail, especially those who:⢠panic at the optics of an RS
⢠donât want to hold a higherâpriced, lowerâshareâcount position
⢠assume dilution will follow
⢠After the RS, management can raise capital or court new institutional investors at a higher share price, which institutions often prefer because:⢠many funds have minimum price threshold
⢠some cannot buy subâ
$5 stocks
higher price looks more stable even if the mkt cap hasnât changed
frustration is retail spent 6 years holding, absorbing dilution /volatility, only for mgmt to potentially âhand overâ company to new institutional entrants at a cleaner cap table
Retail often carries risk while institutions wait for the âreverse split does not inherently benefit mgmt unless
1. plan to raise capital immediately after
2. want to attract institutions
3. want to avoid delisting
4. want to reset stock structure before major catalysts
