consolidation - pros and cons, page-5

Thanks for the views expressed about consolidation.

The pro case, as best I can muster it, is as follows:

If it is true (and I believe that it is) as the article quoted in Dougal's recent post suggested, that some institutions are not permitted to buy shares having low prices, then consolidation could lift the share price to the level where these institutions would be allowed to buy, thus strengthening the demand for POH shares which should push the price up.

Generally speaking, from my experience, a low share price (sub 20c) is often symptomatic of a company that has not been doing well - lots of share issues to keep afloat depress the price - so low SP & heaps of shares on issue is a stigma of failure that can deter potential investors.

In my view POH should be dressed up now by a consolidation so that when the good news comes later this year the negative stigma will have disappeared and POH will be more attractive to those thinking of coming on board.

I think a consolidation would help boost POH's market cap to a level more closely reflecting its intrinsic value.

In the example of the BLT consolidation which I quoted (up 200% within months of a 25 to 1 consolidation) there were some interesting events occurring in the development of one treatment around the time of the consolidation and afterwards which probably helped the SP rocket, but POH has many more irons in the fire.

I have seen lots of comments in the POH forum bemoaning the market's lack of appreciation of POH as reflected in the SP despite all the potential. I suggest a consolidation might help improve the market's perception of POH.

These are only my views - I might be wrong, but anyway I am interested in this topic and appreciate the opportunity of learning from the comments of others