$Direxion Daily FTSE China Bear 3X Shares(YANG)$
I’m looking at YANG's upcoming reverse stock split through the lens of past splits and their impact on stock prices. Reverse splits are typically enacted when the share price has fallen below a certain threshold and the company wants to raise the price, either to avoid delisting or to improve investor perception.
Here’s a table summarizing the prices for companies that have undergone reverse stock splits...
For companies with reverse stock splits occurring recently (like Sonim Technologies), their post-split prices a month later are not yet available
Based on similar cases, here’s what I anticipate:
Before the split: Looking at stocks like Nikola and Sonim Technologies, which saw prices hovering between $0.30 to $2.00 before their splits, it's likely YANG's pre-split price will be on the lower end, necessitating the split to comply with market standards or appeal to investors who might be turned off by very low prices.
One month later: However, history tells us that many companies struggle to maintain these higher prices. Nikola dropped from $21.80 to $10.73 within a month—almost a 50% decline. This shows that although a reverse split boosts the nominal share price, it doesn't address underlying company performance or market conditions, often resulting in a subsequent drop. If YANG follows this trend, we could see an initial boost followed by a steady decline a month later, as seen with other stocks in the table.
In conclusion, while the reverse split will likely give YANG a short-term price bump, the long-term impact may depend on external factors like market conditions, especially with its focus on China's stock market, which has been quite volatile lately. Based on the data, it's important to remain cautious and consider if YANG's underlying fundamentals support a sustained recovery."
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