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16:53
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Originally posted by rigormortis
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Some top companies have several billion shares but which have good value. Consolidation is not random. If a share price gets very low it will lose respect from investors for there surely must be a good reason for the sp being too low. Apart from a company having a bad product, issue of too many shares can dilute the value of shares if a company is not growing. The main problem is the effect on potential raising of capital by issue of more shares when the shares have little value and there is hardly any margin incentive. For example, how many shares would you need to issue to raise $10M from a 1c share price? That's right: 1B shares added to the register. Under that unlikely scenario and dilution you would have to carry out eg a 20 to 1 consolidation to give the share some appearance of value after the capital raise.
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Lovely post. Which in no way addresses my question of the poster.
