No help to the economy
Following on from toe-dipping back into equities (stocks, shares, whatever), yesterday the US shares of the Royal Bank of Scotland underwent a reverse split. Each share on the US New York exchange is now worth 20 of the UK shares. Why? 
I see that to be listed on the NYSE they expect a company’s share price to be above $2 and there was no chance of RBS recovering to those levels in a reasonable time. From Monday the shares are worth nearly $20 so they are okay. For now.
So, what about all those other companies who have suffered a large drop in share price? Either the NYSE can change the rules, perhaps only temporarily, so that organizations do not have to undertake reverse splits like this, or the rule stands and more of these reverse splits take place. The problem I have with the latter is that reverse splits involve costs to the companies in trouble, with money going to brokers and various elements involved in the equities business. It also costs shareholders money - it cost me $20 in fees. Seems to me that these sorts of costs do nothing to help the economy get back on its feet, but simply provide an extra income stream for the middle-men who add absolutely no benefit to the economic recovery in this way. Time for the NYSE to face up to today’s situation.
Just my 2 pence worth. (Now worth only 3.2 cents).
Tags: NYSE, RBS shares, reverse splits