VML General Comments - Chat, page-1243

Market Cap is king. Market Capitalisation is the single most important benchmark you should be using. Whether company A is $1 per share or company B is $0.10 per share means nothing to me. Their respective MCs allow me to get a feel of (fair)value - or overvalued or undervalued. Short term, the goal of a consolidation is to reduce the number of shares on issue. Longer term, it depends on whether the company has fought its battles to get to a stable position hence they time it when there wouldn't be a future need of CRs, or as you say, could be to 'rinse and repeat' to pave the way for another 10 rounds of CRs. There is no crystal ball to predict the future, but look at the management and 'stage' of the company - how close are they to being cashflow positive? How much more money do they need before they get to that point? Have they made progress in the last few quarters, or is it merely a lifestyle company to fund a lavish lifestyle for a few crook bastards? CRs are not always a bad thing, especially if they advance projects and add value to the company.

In summary, don't be too tied up in SP, but shift your focus to MC. A SP rise after a consolidation is not an 'artificial boost'; it is a balancing of the equation because one variable (SOI) has changed. MC = SOI X SP. If SOI goes down, SP must rise; MC is not affected by a consolidation. Therefore a consolidation does not cause a company to lose value. It is the actions following a consolidation that moves the MC up or down. I hope this helps.