In my opinion the month of may is the month whereby shares are sold off. The company in it's wisdom? is paying a 12 cent return to shareholders and reconsolatating the shares 10 for 1. Why to make shortsellers stop borrowing the shares but make the shorters buy back positions.
25th of May 2011 you have 10 shares at 1.50 each worth $15 26th of May 2011 you now have 1 share @ $15 each worth $15
There is nothing sinister in this Instead of trading at $1.505 The new shares can trade at $15.04 smaller spread!
25th May If the compamy was valued at (3.3 billion shares x $1.50) $5 Billion. 26th May If the compamy was valued at (330 Million shares x $15) $5 Billion.
You can see there is no change in the valuse of the companies worth it's still $5 B If your house was worth $600,000 and there were 3 shareholders each share would be worth $200,000 now if there are 30 shares each share would be worth $20,000 that is provided the value of your house does not change overnight. Do you GET IT ? Companies are valued by Market Cap NOT the nominal price of the share!!
OZL Price at posting:
$14.85 Sentiment: None Disclosure: Held
