entitlement offer closed :), page-25

EMC2 - No offence, but it seems that from your comment below, you lack a deeper understanding of how a company?s capital structure can influence it?s share price.

======= EMC2 comment extract:

?It absolutely amazes me that some who haven't done their homework on a company's MC actually think the SP performance somehow has a magic link to the amount of script issued, I believe they only put this on the forum to influence those who may actually believe what they are saying.

The SP performance has buckleys to do with amount of script, the MC is the markets appraisal of the company's value and current SP value reflects this, and so script number changes can't change the MC, it's the MC relative to perceived or actual value of the company's future prospects, is a consolidation going to change this?????

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In GGE?s situation, consolidation can, and does affect the share price. GGE?s share price has been stuck at 0.004 for sometime now. Part of the reason for this is that the only possible movement upward is to 0.005 (a 25% increase in market value). This means it requires news flow or a change in sentiment which is worthy of a 25% increase in the value of the company. 25% is a massive amount and can be attributed to a significantly positive announcement, one which changes the outlook of the company quite substantially. Have our announcements warranted a 25% increase in? I?d probably lean towards yes, but others and the market are still unconvinced. Maybe they believe it?s only worth a 12.5% increase in the market value, where a share price of 0.0045 would be justified. However, unfortunately due to the capital structure of the company and ASX trading rules, 0.0045c is impossible, hence these buyers sit on the sidelines, leaving us stuck at 0.004
Contrast this against a share price of 0.40 post a 100:1 consolidation. At this share price level, the ASX allows increments of 0.05c at a time, so those buyers who previously believed the announcements justified a 12.5% increase in the market cap are able to buy in at 0.45c. Buyers to some degree, perceive stocks at these higher levels as less volatile and speculative in nature, warranted or not. It?s a fact some people stay away from microcap penny dreadfuls. A higher post consolidation share price out of the doldrums of 0.004 will increase the base of possible GGE shareholders. There would be less 25% gyrations in the market value, allowing the share price to increase at a sustainable rate, creating a stronger trend and chart.

And before you all jump on me with the stock standard HC anti-consolidation post of ?look at the empirical evidence blah blah blah?, ?look at what happened to VLA, CCC, OZL, SBM?, just remember their share prices weren't 4 pips away from being 0.