No a consol isnt a problem in a healthy company, trouble is on the ASX its usually done by cash flow unhealthy companies, especially Biotechs and mineral explorers who have done so many CRs the SP is under 1c and cant be diluted much more. So they consolidate to lift the SP, and dilute it down again.
A cash flow healthy company usually benefits from it, because the market perceives a free float less than 1B SOI s a sign of a well managed company, and a useful amount to create sufficuent liquidity. Also too many SOI can slow down line wiping, ie the price can linger too long at every level. Trade a "popular" stock with a low free float to see how quickly the price can move. Thats important in Australia, because liquidity is one of the factors used to assess a stock's suitability for an index.
@Gwnoys BCN is not a pip trading stock - liquidity too low. Theres been a recent controlled selldown, but I also think many have bought in, to see their value drop quickly by the selldown and negative sentiment from falling PoG, then attempt to get out at the same level, or one pip lower if they can take that loss. Its a perennial problem in a bear market - buyers keep wrong footing their entry point.
@1for1 Successful consols - SXY recently (making cash) , LYC late 2017 (near term cash flow) , BOE recently (near term cash flow).
@MetalBee That Cabot Wealth article is not relevant to the ASX, which does not have a min SP for entry to an index like the Nasdaq does. It's liquidity and Mcap that are the main requirements for the ASX. For eg, HTA is in the ASX 300 with a SP of 6.9c, and 13Billion SOI.
In regards to the consolidation, both sides of the argument shown here are presentable, but I doubt a consoliation would be useful at BCN's valuation, because
most are here for the divvies, and are holding not selling, hence the usual low liquidity
at an Mcap of ~$80M BCN is not even close to the smallest company in the XAO which has a $261M Mcap, so its not entering a main index any time soon. (Note: many of the larger conservative instos like super funds only allow their member to trade ASX300 stocks)
Then finally theres the curious issue of Aussie investors love of big name stocks. - they rather pay a multiple of 30+ for a big guy like NCM, than get a high value low priced one like BCN , X64, or KRM. So Beacon remains unloved on that front too. Works for me though.....lol.
(20min delay)