RE: Re: Ukog28 Sep 2019 10:32
Although a share consolidation can improve share price over the short term, it is important to remember that the market capitalization of the company has not changed. With that in mind, some experts consider a consolidation nothing more than a distraction to assuage investors during times of corporate uncertainty. Expert Reactions to Share consolidation
Charles ******, president of the investment consulting firm Equity Analytics, told Bankrate.com, "It is usually a very negative sign when a company consolidate their stocks." But how the market reacts often depends on what else the company is doing to reverse its fortunes.
If it simply declares the consolidation and goes on with business as usual, investors may see the split as nothing more than a smoke screen, and the price may go right back to falling as they sell their shares. But if the split is accompanied by serious changes in management, structure or strategy, investors may give the company more time to right the ship