After a conventional consolidation, good news often follows!!!!...

After a conventional consolidation, good news often follows!!!! Let's hope this is the case for Xped Ltd.

Why Consolidate?

Companies mainly consolidate their shares when they want to draw attention to themselves — because they expect earnings to rise faster than normal. While size shouldn't matter, there are investors who will not buy 'penny-dreadful shares'. If the value of a stock collapses to mere cents per share (as in our case), investors may think it is headed for zero. To bring its share price back up to more respectable levels, the company may consolidate.

With a share consolidation, the drawbacks of small-scale share prices are removed, the main one being the high percentage bid-offer spread on 'penny-dreadful shares'.

Share consolidations are a minor stock market trading detail. You shouldn't let it distract you from the more important matters such as the company’s fundamental value and how well it suits your investment objectives.

Consolidation is also viewed to some degree as a way of shrinking the number of shareholders to a more manageable size, as some smaller shareholders with just a few shares remaining after a consolidation takes place might see little point in hanging on. Hence the other announcement released today regarding "unmarketable parcels of shares".

So really, anything can happen after a share consolidation - good, bad or indifferent.

What matters above all is not how many shares are outstanding or what level the share price stands at, but how well the underlying business is being managed and how much revenue is being generated.