What this means is the nearly 500 million share float will become a 50 million share float, hopefully helping the company out of the multi-year slump it has been in. At one time, Conexant was on target with the likes of Marvell and Nvidia. Conexant makes set-top semiconductors for broadband devices.
I made a speculative investment in this company initially in January of 2006 when the stock was around $3.25. At the time, things looked good but when figures didn’t pan out, the stock began a downward spiral it hasn’t recovered from. Nevertheless, since then I bought a couple hundred more shares on the way down. Now with the split it should produce a better price action for the company.
Psychologically, people don’t like buying stocks when they are under $1.
Bluefly is starting to recover from their reverse split earlier in the year and I expect Conexant will do the same. Conexant is up 10% in mid day trading on this news.
I own shares of Conexant and Bluefly.
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