Yes folks… its been almost a week since our last post (and some 19-days away from the “delayed” launch), and investors are still awaiting news, PR’s, advertising… ANYTHING ! Some are even speculating on another delay. The only thing that seems to garner investors attentions lately… is the talk of the company doing a Reverse Split on the stock.
Now the IC Punch Media CEO Steven Samblis has stated numerous times on message boards that he is not doing a reverse split. That should be good enough, right? Well for many, its not. For those that think Mr. Samblis has a huge creditability problem, his words mean nothing… even if they are in writing. They would point to the many previous in-writing statements that Mr. Samblis has made that have been proven to be… shall we say… reckless with the truth.
Many may remember Mr. Samblis stating he was not going to do a reverse split because “there is no reason” for it. Now some say that leaves him an out should he decide in the future to do one. All he needs is a “reason”, and there ya go… he will say he never mislead investors. What could the reason be, and/or how could the reason be sold as justification for a split? Of course, the main reason that will be cited for any justification will be… its all for the investors. He will do it for the investors, in an effort to increase share value and provide you better return on your investment. A reverse split will be sold to investors as the best single action management could take to maximize your investment. Investors will likely be told that a higher PPS will attract new investors, and a higher caliber investor… one’s with deep pockets. He will likely say… a rising tide lifts all boats, and the long time investors will benefit the most.
Now, there are those that will say Samblis will never do a reverse split because it would drive away current investors. Well its pretty obvious there are very few long term investors left. Most hanging on now have lost so much of their initial investment, the only reason they are still here is because what ever little value they have left is worth the risk just in case something good does happen. They are still in it no matter of it goes to .0001 and no bid, or, goes to a dollar. However its more likely anyone in it at this point will sell the second they recover their initial investment, should that ever materialize. At this point it looks like they may have a better chance of hitting the lottery.
What is worse than a reverse split… the rumor or likelihood of one. At this point, given Samblis’s creditability problems with many investors, his statements on not doing a reverse split are unable to quell the rumor of one. Most times all it would take from a CEO is to put in writing that he will not do a reverse split, but if there is a creditability problem, such does little to beat back the rumor. With no ammunition to beat back the rumor… many are free to speculate, question, and put forth their own thoughts about such. A rumor, that gets repeated and circulated across numerous message boards and other electronic media soon becomes a likely reality. When the rumor becomes accepted as a possibility, and has already done much damage to the PPS… the CEO has an easier time justifying doing the split, or doing what many thought he would do anyway. The damage has already been done, so any possible negative impact will be lessened because many will have been expecting it.
So, with a lessened negative impact for doing a reverse split… it just may be a good business move to actually do one. At the current PPS many deep pocket type serious investors will not even consider investing in the stock. However, at say a PPS of around .25, .50, or even 1.00… more investors may (we say MAY) consider it, thinking its a real company with potential. However… the reality is, any serious “new” investor will certainly do some research on the company before investing, and within 5-minutes or so they will start to see some red flags. Although the higher PPS might initially attract them, the company’s history may be cause for concern, and ultimately be the deciding factor to pass on the purchase until there are reasons (profitability) to reexamine a possible investment.
Make no mistake about it… we are NOT suggesting a reverse split. We think it would be bad for the stock, and company. We are only pointing out that a reverse split may not be as farfetched as some think, in spit of what the CEO Mr. Steven Samblis has stated. No matter how many times Mr. Samblis states he will not do a reverse split, his creditability with many investors has been shattered, and therefore his statements, albeit in writing, carry little weight at this point.