On Nov. 4, investors rekindled their interest in Nova Mining Corp (OTC:NVMN) for the first time in three years. Was it just a pure coincidence or a direct consequence of the 5-for-1 stock split announced on Oct. 27
Last Friday marked the first trade with NVMN shares since September, 2008. Eventually, NVMN closed the session at $0.50, shifting as many as 500 shares. Four days later, i.e on Nov. 8, NVMN doubled its value on a much higher volume of 20 thousand. However, this turnover was only based on three transactions, which suggests that select market players manoeuvred to have their positions organized to their own advantage prior to Nov. 11 when the stock split will come into force.
As it seems, a couple of investors are attempting to boost NVMN stock up before FINRA has processed the split. According to the decision taken by the BoD, stockholders will be given four additional shares of common NVMN stock for each common share they possess as of Nov 11, i.e tomorrow. Moreover, the company’s management has defined the additional amount of shares as ‘stock dividend’ for shareholders of record. Since the split will add no real value to NVMN stock, the post-split value of each share will be five times less than its present market price.
In a nutshell, by deciding on a stock split, the company leaders might be pursuing two effects, i.e to make NVMN shares more attracting to market traders by decreasing their value and, at the same time, keeping a positive trend at any cost. Given that NVMN’s deficit net worth exceeds $300 thousand and revenues are nowhere to be seen, the mission seems quite a challenging one.
