SpongeTech (SPNG) announces 1:100 reverse split
Today's Financial News - Posted September 8, 2009
No more square pants: SpongeTech (OTC BB:SPNG) wants to go mainstream!
by J. Christoph Amberger
Baltimore, MD — TFN: Two weeks ago, we recommended our Hot Stock Confidential members sell half their position in SpongeTech (OTC BB:SPNG) for 30% gains, hoping to ride out the rest for more.
Today, we’re “down” to a 13% gain. TFN guru Andrew Snyder originally saw this penny stock hot shot as a dollar stock in the near-to-medium term. He’ll get his wish earlier than anticipated — but not quite the way he assumed: The company just announced that it plans a 1-for-100 reverse stock split to take effect on September 22, 2009.
Instead of holding 100 shares worth $0.147 each, you’ll now hold 1 share worth $14.70.
Tomato, tomahto? The split supposedly “demonstrates our commitment to establishing SpongeTech as a world-class company whose capital structure, operations and infrastructure all match the impressive sales growth we are achieving.”
Good grief. Can’t they just come out and tell us they want to go NASDAQ?
We’re in two minds of this move. In the short term, it will make the shares less volatile. Which unfortunately means it will dampen the radical penny-share upside. On the other hand, a NASDAQ listing will open access to a different kind of investor… and a different magnitude of capital flows. Let’s move this one from the short-term pay-out pipeline to the medium-range growth section. And hold!
Next Article: Where will Spectrum Pharmaceuticals (SPPI) and Cell Therapeutics (CTIC) go from here
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September 14th, 2009 at 11:40 am
You have got to be kidding- they will not get on the Nasdaq until far more than a 4.00 price is achieved-
1. they are on Variable accounting due to insufficient shares to accomodate warrants that are currently out.
2. Many of the debt agreements are ratcheting and could forclose on the company quite easily in the event of weak performance.
3. the company has included 100 vote per share preferred and Series B stock that will inflate to double the outstanding at some point in the future.
Total Scam