Golden Valley Development Inc (PINK:GVDI) reveals a heart-tearing chart the last two days. Apparently, GVDI resumed trading actively a couple of days ago after a period of low trade.
The company’s stock entered this low active period after it executed a reverse stock split in May this year. The OTC markets indicate that on May 16 2011 GVDI decreased its shares by a 1 for 2000 split.
I don’t know what kind of reverse split GVDI did, but the company still has a huge number of outstanding shares. The OTC Markets report that the company has 23 billion outstanding shares and a market cap of $23 million.
Just for comparison, when I first had my focus on the company in November last year, the company had a market cap of only $470. Thus, it becomes more obvious why GVDI experienced such a sharp correction in the last days.
Two days ago, on a volume of 3.5 million shares, GVDI shares declined by 95% to $0.0032. But this was not the end of the story. Yesterday, GVDI went another 68% down on a volume of 189 million shares.
If GVDI continues declining at this pace, it will not be long before it finds itself at .0001 and another stock split becomes inevitable. Reverse split may seem beneficial in general, but in the land of penny stocks it is not and GVDI is a perfect example of this rule.
