August 19, 2011 | In: Financial

AIB: Another Reverse Split

AIB (Allied Irish Banks, plc.) has been trading for less than a dollar for more than 10 days already. Now we know that a stock will be delisted from the NYSE if it trades for less than a dollar for over a month (apparently, NYSE does not like penny stocks). This means that if the stock does not break the $1 level in less than 20 days, then AIB will have to do another reverse split. If by the time of the reverse split the stock will still be worth $0.76 (which I highly doubt, this stock is cursed, it can go and will probably go down substantially more), then here’s what will happen after the reverse split (if the reverse split is 1:5, which means 5 stocks before the reverse split will equal 1 stock after the reverse split):

– The stock price will be $0.76 x 5 = $3.8
– The number of public AIB stocks will be 246,000,000 shares (1,230,000,00 / 5)
– The stock will keep on declining, this is because reverse splits are bad for stocks, and are not the sign of good times.

A quick note about AIB. Its market cap is now below $1 billion for the first time in its history. And to think that the company had a market cap of almost $400 billion back in February of 2007… I guess nothing is too big to fail!

1 Response to AIB: Another Reverse Split


AIB Delisted from the NYSE « Fadi El-Eter

August 28th, 2011 at 9:40 am

[…] though there was going to be another reverse split, but I was wrong. AIB (Allied Irish Banks) elected to delist itself from the NYSE after reaching an […]

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