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Buy-Backs and Reverse Splits
Key considerations for directors:
• Buy-backs and reverse stock splits are often better in theory than in practice—especially for many small-cap companies.
• Historic data are the best tool for directors to use in gauging the likely effectiveness of buy-backs and reverse stock splits.
• Buy-backs often don’t succeed in stock price appreciation for many small-cap companies.
• Reverse stock splits to maintain senior exchange listings face uphill battles.
Common mistakes to avoid
• Relying on advisors instead of data to help analyze the likely effectiveness of buy-backs and reverse stock splits.
• Undertaking buy-backs in the absence ...