Sandstorm reverse stock split.What does this mean for us share holders. I have 22,000 shares. How many will I have after the split. I bought that many in hopes of the stock going up and every time it goes up by one, I make 22,000. Will I make the same about of money. I have another 40,000 to put in but I may wait to see what happens. What do you think
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This is a 1:5 reverse split (i.e., “consolidation”). If you have 500 present shares you will wind up with 100 new shares. Usually a reverse split follows a falling stock price and so it is a bad sign–of a falling stock price that will probably keep falling. This situation is different. The price has not been falling.
A higher stock price would allow institutional investors to buy in. Many are limited by internal regulations that forbid them from buying stocks below a particular price, typically $5 per share. We individual investors very much want other investors to buy in, especially rich ones who buy a lot like institutions.
It would also allow Sandstorm to be included in stock indexes, and thereby in index funds. Index funds HAVE TO buy stock of companies in the index, whether their outlook is good or bad. This drives up the price of companies included whether or not they deserve it.
On the other hand a higher price makes it easier to short a stock. It seems crazy to short Sandstorm, but pendulums do swing and some day the gold price will fall and take gold stocks with it.