Great post, BumblebeeRR. Thanks a lot!
I do very much agree that this is in no way the doomsday scenario some believe. One poster even called this the worst case. No, it is not. Worst-case scenarious would be that the technology doesn't work, POET won't be able to close deals or it would be taken out by a low-ball offer.
Mathematically a reverse split (as well as a split) does not change anything at all, thanks to the rule of three. And mathematics is what really counts here!
Aside from (non-existing) mathematical effects, two things remain:
- Negative psychologicals, as discussed here. I consider management's unspoken message a major failure: "We won't be able to maintain a share price above NASDAQ's $2.00 by closing deals, by making money. Therefore we desparately need this cosmetic consolidation to pimp ourselves in order to get listed on a serious US exchange." This is (I hope) not what management believes, but this is what parts of the market perceive.
- Factually guaranteeing a NASDAQ listing with the positive effects of more investors being able to buy POET shares and thus raising the share price. This is very positive. However, I would prefer POET Technologies to be able to get the NASDAQ ticket from its own resources and without such a sleight of hand.
Overall this could send some earthquake waves into the market. They will shake off weak and mathematically inept hands, and will (caution, clichee ahead) create buying opportunities. But they will not cause any permanent damage. As far as we know, great things are ahead that will outnumber any transient irritations.
Still not enough yet to make me vote YES.
What I am more afraid of is dilution by capital raises with exclusion of subscriptions rights for shareholders or by improper option plans. Could we please also discuss that?
Andrea ("Powered by POET")
