Capital Raising, page-58

" Liquidity is a big factor and at 10/1 with 350 million issued shares, where's the liquidity??"

Good morning Rolling!

I will try to answer your question. Surely "liquidity" relates mainly to the average amount of stock available for trading by value? That is how easy it is to sell or buy a certain dollars worth of stock.

All other things being equal, where you put the decimal point should make no difference. Would you consider Google or BHP an illiquid stock?

All other things not being equal, the only reason I can see for a consolidation making any change to the amount of available stock is the common assertion that day traders prefer "low priced" stocks. If this were true then a consolidation might reduce the amount of available stock by removing them from the equation but the reason daytraders like "penny" stocks as opposed to "dollar" stocks (excuse the missed terminology) remains a mystery to me.

Apart from the convenience of just moving the decimal point, I think 10:1 was mentioned because "US institutions" aren't allowed to buy "stocks of less than a dollar". Apart from being a seemingly absurd attitude on the part of the US institutions, this again strikes me as a furphy as is not this attitude usually accomodated by creating American ADR's in a ratio which allows this to happen??

pj