A look back on predictions made in February of 1H 2011 reverse splits

Jul 29, 2011 No Comments by

On February 14, 2011, I listed about a dozen companies facing delist from NASDAQ or a reverse split to remain listed on NASDAQ during 1H 2011. I now follow up the list by firstly noting my prediction, then what actually happened.

(First bracket indicates price as of FEBRUARY 14) – (Second bracket indicates price REVERSE SPLIT ADJUSTED in order to make comparisons easier, as of JULY 28 2011.

APPA ($0.47) ($0.31) Predicted reverse split 2Q or OTC delist. Delisted to OTC April 1 – CORRECT.

ARYX ($0.31) ($0.02) Predicted early-April delist to OTCBB, rather than a reverse split. Delisted to OTC March 14. – CORRECT RESULT BUT OUT BY A COUPLE WEEKS.

APPY ($0.57) ($0.66) Predicted delist or reverse split early 3Q, 2011. Reverse split July 29. – CORRECT.

CAPS ($0.53) ($0.25) Predicted reverse split mid-2Q. Delisted from Nasdaq July 20. – TIMING OUT BY ABOUT TWO MONTHS AND THOUGHT THEY WOULD SPLIT INSTEAD.

CTIC ($0.34) ($0.22) Predicted Reverse split 2Q or OTC delist. Reverse Split May 16. – CORRECT.

EPCT ($0.69) ($0.47) Predicted late 2Q reverse split. My timing was clearly wrong here. While they have permission to split, this will more than likely occur during late September 2011. TIMING LIKELY OUT BY 1Q. INCORRECT…FOR NOW. –

GNVC ($0.51) ($0.28) Predicted reverse split mid-late April, 2011. Reverse split April 19. – CORRECT.

INSM ($0.58) ($1.13) Predicted reverse split 2Q. Reverse split Mar 11. CORRECT RESULT BUT TIMING OUT BY ABOUT ONE MONTH.

NLTX ($0.63) ($0.70) I did not actually spell this one out, but hinted at a delist.

PARD ($0.41) ($0.20) Predicted late 2Q reverse split. Holders are still voting on this one. They had a chance in late 2Q but failed to deliver so I guess this one goes down as INCORRECT – AT LEAST FOR NOW.

SPEX ($0.52) ($0.20) Predicted reverse split March or April, 2011. Reverse split May 9. CORRECT RESULT. TIMING OUT BY ABOUT ONE MONTH

ABIO ($3.15) ($1.47) Said that delist to OTC was a possibility but unlikely. Still listed on Nasdaq.

While it is by no means rocket science in predicting which companies will more than likely reverse split, if you can predict the likelihood AND timing then this can be used as a useful trading tool. Comparisions of prices following my post show that 9 out of 12 stocks have depreciated significantly since my post. TWO went against the trend, NLTX, has risen a fraction but the one that stands out is INSM which has almost doubled! (N.B. ARRY enforced its split today so not possible at this early stage to gauge reaction).

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About the author

Currently residing in New Zealand and employed in the education industry, Mr. A. Burden holds a M.Com in International Business from the University of Sydney and used these skills together with his passion for investing to establish BioPharmCatalyst in June 2010 as a tool for investing decisions in the US pharmaceutical market. He spends much of his free time mountain biking, playing squash and hiking.
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