If a company has 1,000,000 shares issued, and is worth $1 per share, the market cap is $1,000,000.
Let's say that you own 10,000 shares or $10,000. You expect it to go to $10 per share, for a profit of 90K ($100K total)
They consolidate at a 10:1 ratio. The company now has only 100,000 shares, you have 1,000, but each is now valued at $10 instead of $1. Still a 1M market cap. Nothing changed except the number of shares.
If the price went from $1 to $10 before consolidation, that'd put it at a market cap of 10M. A 1000% gain.
If it went to the same 10M market cap AFTER consolidation, it'd be going from $10 to $100 per share. A 1000% gain.
In both instances, the price has risen 10 fold and ended up at the same market cap. Nothing changes except the number of shares on issue.
VML Price at posting:
4.2¢ Sentiment: Buy Disclosure: Held
