Share Price Info

[G-Rich]

Hi,

I work for a company whose share price has quartered over the last year. The company itself is profitable, and will maintain last years profitability but is unlikely to show growth this year. The recent demise of Lehman has hit us quite hard.

In watching the share price, I can see it falling a couple of pence a day - at that rate, it will be non existent in a month!!! I know markets fluctuate, and it's all really volatile at the moment, but this is a fairly constant downward trend.

So, what happens when a company that to all intents and purposes it making profit has it's share price plummet to very little. Takeover? Liquidation? I actually have no idea! Just some brief outline of what usually happens in these circumstances would be great.

Cheers
Rich

[R4PID]

I think the first thing they'd consider is a share consolidation to keep the price up to whatever the minimum is to stay in the market. You had 5 shares before, er tough you now have 1.

[G-Rich]

Don't like that idea... not a major shareholder of course, but don't like seeing money evaporate.

Surely if it comes to something like that, effectively you're admitting the company is screwed and thus the market will turn on you anyway - seems like a way to simply delay the inevitable.

[sprinter885]

In the words of that old luvvie Michael Winner Calm down dear! It's only temporary..

[G-Rich]

Tell that to the unfortunates that are getting made redundant!

Not me of course... highly valuable asset.... (cough)

[Dogwatch]

Surely the share price is a reflection of how the market thinks the company is doing rather than a barometer of what it is actually doing. The market can be wildly pessimistic (as now) or wildly over- optimistic when times are good.

Having the share price drop because you are in a currently dodgy sector like Financials doesn't necessarily mean the company is going down the plug-hole and it may be trading normally. Of course it does mean that suppliers and customers can get jittery, as well as making raising capital more difficult, and if things get out of hand the business folds simply because everyone expects it to.

[The Black Flash]

Same boat mate. I had options worth over 50 grand last year, just today they're down to 4. Same st, the sector plumets because someone else goes tits up, and it drags everyone down with it - doesn't matter if you're still profitable or not.
Just gotta take the long term view I guess

[trooperiziz]

In my experience the directors will lie to the stock market, get put away for 3 years and 70% of the company will be made redundant...

[G-Rich]

We released a very neutral and honest statement last week and the market responded poorly to it. So I think at least we are not going to jail just yet.

Anyone seen 'Fun with Dick and Jane' (the clean version!)??