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No. of Recommendations: 7
"...Wall Street analysts and finance professors say the most common reason to go through a reverse stock split is to increase the VALUE of company shares without improving a company's financial performance...

No! A stock split, whether reverse or the more common 2-for-1, 3-for-1, etc. has absolutely no effect on the VALUE of the pie, merely the price of each slice. I.e., following the split, you now have a pie with four slices instead of eight (in the case of a reverse 1-for-2 split), or 16 slices instead of eight (a 2-for-1 split).

"...The dividend would also triple in value, so that shareholders end up getting the same payout as before..."

That's key. I.e., no change. Simple.

"...Companies with fewer shares can boost earnings per share with smaller financial gains. That's not inconsequential in a competitive arena where investors compare per-share earnings growth when deciding where to invest their money..."

Totally bogus! In reading at an earnings report are you looking for the percent change in EPS, or the number of cents by which the EPS changed? (by the way, that's intended to be a rhetorical question)

..."When analysts look at our growth rate, they're saying Duke is growing only a penny but they're overlooking the fact that it's equivalent to another company growing a nickel..."

Absolute BS!

"...While most utilities trade between $30 and $60 per share, Duke is one of the lowest-valued utility stocks in the country..."

Lowest-PRICED, yes. "Value" is another matter entirely.

"...Once Duke reduces its shares by one-third, it's stock value will be comparable to other utility companies..."

One agian, substitute "PRICE" for "VALUE"

"...Progress is valued at $48.36 per share, more than twice as much as its bigger cross-state neighbor..."

Aha! The reverse split is to make it appear to Progress shareholders that they're getting the same "value" from the merger. Or as was said by an overly aggressive sales manager in a TV commercial some time ago, "OK, now, let's put some lipstick on this pig!" (Not meant as a comment on either Progress or Duke.)

Now ask me what I really think ;^)
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