Q: Peter and His Wonder Team
Just noticed CET is consolidating 7 for 1.
In general what do you think of this move? Will the cost of the new share be 7X more? Thanks for your insights...always helpful.
Just noticed CET is consolidating 7 for 1.
In general what do you think of this move? Will the cost of the new share be 7X more? Thanks for your insights...always helpful.
5i Research Answer:
Yes, in any consolidation the price of shares will be adjusted upwards by the amount of the consolidation ratio, initially. But investors do not generally like consolidations. It reminds them that the stock has not done well. But it can work at times, attracing more interest. Many funds will not buy stocks below $1.00. Mathematically, of course, it is a neutral event. The stock is very cheap, and with a market cap of $1.4B we can accept this move by the company.