Reply To: NEW penny stocks only

[Lance Thompson]

Whelp,

Many of you are well-versed in how stocks work so you can just skip what I’m going to say here because you understand this stuff, chapter-&-verse. But for those who are not so educated on how they work, the latest development in JFBR is a very good educational moment regarding when a company does a stock-split vs. a reverse stock-split. Let’s say that a company offers a 2-for-1 stock split vs. a 2-for-1 reverse stock split.

-If a company offers a 2-for-1 stock split that means that the number of shares you own get multiplied by 2 but the stock’s price gets divided by 2…………The # of shares goes UP but the stock price goes DOWN. Stock splits are “almost always” only implemented when sales and revenue is going extremely well.

-A reverse stock split is the exact opposite……..If a company offers a 2-for-1 reverse stock split then the number of shares you own gets divided by 2 but the stock price doubles……….The # of shares goes DOWN but the stock prices goes UP. Reverse stock splits are “almost always” only implemented when sales and revenue are extremely abysmal. Now with Jeff’s Brands based out of Tel Aviv, Israel that makes perfect sense. Why? Because Israel is currently at War with Hamas. Simply not any business being conducted in Israel right now.

In this case JFBR just implemented a 7-for-1 “reverse” stock split and at the time I owned 1,700 shares at I think about $.75 cents a share. Well I now only own 328 shares at the current price that you now see of $3 a share, up from the $.45 cents we were at last week. So yeah, the stock price went up nearly 10 times the current price but shareholders had the amount of shares they owned divided by 7 (although just like the rest of you, the amount of shares going down to 328 was some fuzzy math to me…….or as you youngins like to say, the math wasn’t mathing)…….I can only tell you what it says when I check my brokerage account.

It is what it is. But it’s a good real-life example to show you how complex stocks are.