Cutting the dividend was smart, and as for the 1 for 15 reverse split itself I’m not one of those who has strong opinions on splits and reverse splits (though I think when there’s little good news a reverse split might just offer Bears more downside potential – as it did for a while with C after their 1 for 10).
What worries me more than the reverse split itself (besides their continued customer hemorrhaging of course) is they’ve stated that, after the 1 for 15, allowable share volume will be reduced 1,750,000,000 shares to 175,000,000 shares. That’s a 10th as many, not a 15th, which sounds like they’re also going to issue shares for a capital raise.
Unfortunately M* was late in significantly dropping their Fair Value Estimate and updating their analysis with the full weight of how bad things look, so I jumped in at $4 without doing enough research. Always check multiple analysts!! I don’t have a short horizon on that money, but I’m still starting to think I might be better off cutting my losses.
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