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Microcap & Penny Stocks : TGL WHAAAAAAAT! Alerts, thoughts, discussion.

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To: Jim Bishop who started this subject10/21/2001 6:06:26 PM
From: jmhollen  Read Replies (2) of 150069
 
Kind of looks like KKRS could tank bigtime on Monday (from iHub).......

Kanakaris To Complete 20 for 1 Reverse Split

siliconinvestor.com

Houston, TX -- (OTCBB NEWSWIRE) -- October 20, 2001 By the tone of readers that wrote to us, shareholders are disgruntled with Kanakaris Wireless (KKRS: .04). The company filed a PRE-14C (Preliminary Information Statement) with the SEC Friday after the close of trading. The filing declared the board of directors and the holder of a majority of the voting power approved a 20:1 reverse split, expected to be effective around November 23, 2001.

Shareholders feel jilted because the CEO, Alex Kanakaris - holder of a majority of the voting power, did not issue a press release regarding their intentions to complete a reverse split. Besides an overall dislike of reverse splits, investor's trust and confidence in a company is further undermined when the company does not communicate their intentions well with the shareholders.

Reverse splits have a negative stigma. "A lot of investors we talk to don't have a lot of confidence in a company that gets its stock up through a reverse split. They think the company is playing games and trying to get credit for something they don't deserve," said Jon Johnson, editor of a Texas-based newsletter. This lack of confidence in a company is often exasperated when the company attempts to sneak in the reverse split by not announcing it until after, an unfortunate trend on the OTCBB.

More often than not reverse splits temporarily achieve an artificial higher price but ultimately return to pre-split levels. While a reverse split technically doesn't give a shareholder any less, when the post split shares plummet, the investor is left holding an empty bag.

Nonetheless, companies continue to do reverse splits. Usually the problem is severe dilution leading up to the situation where a company has no other choice.

KKRS closed Friday up + .003 (8%). Volume was 1,049,100.

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