We are talking about the consolidation ratio 10:1 compared to 20:1
Illustration A
Of course, if the current share price is $0.010, the consolidation will be 10:1 (i.e., 0.100/0.010). If you hold 100,000 shares, the current value of your holding = 100,000 x $0.010 = $1,000. Your shares will be consolidated based on 10:1. You will be given 10,000 shares at $0.100. The value of your holding after consolidation = 10,000 x $0.100 = $1,000. Of course, the value of your shares is the same whether before consolidation or after the consolidation.
Illustration B
But now, please assume that the share price is $0.005 instead of $0.010. The consolidation ratio will be 20:1 (i.e., 0.100/0.005). The current value of your holding = 100,000 x $0.005 = $500. Your shares will be consolidated based on 20:1. You will be given 5,000 shares at $0.100. The value of your holding after the consolidation 5,000 x $0.100 = $500
Illustration A: the value of your holding with consolidation ratio 10:1 is $1,000
Illustration B: the value of your holding with consolidation ratio 20:1 is $500
So please do not say that higher consolidation ratio is better than lower consolidation ratio. If you do not know how to do this simple calculation, how do you make your investment decision?
My friend = 1 + 1 = 2 and it could not be 10 or 1,000.
ODN Price at posting:
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