Revlon to meet NYSE price criteria via reverse stock split

Just after the bell on Friday, Revlon announced that ...

[the corporation] plans to regain compliance with the New York Stock Exchange's criteria of $1 a share average closing price over 30 consecutive trading days through its pending reverse stock split. ... the company's board had approved a 1-for-10 reverse split of Revlon's Class A and Class B common stock. Revlon has 6 months from the April 2008 notification to the exchange to bring its share price and 30 trading day average share price to $1.00 or above.

This is unfortunate news, and wholly unexpected in light of recent announcements that company insiders have been loading up on shares, expanding product lines are bringing increased revenue, and there is an ongoing campaign to revitalize the brand.

Especially with the penny stocks, actions speak louder than words - and while press releases may brag about the company's hopes, the start reality is that the executives, the board, and the shareholders do not have much faith that the company can pull out of its slump in the next six months, and that a reverse-split is the only measure that will save them from being delisted.

However, they haven't acted yet: the split was approved, but no date has been announced. When that happens, it's time to cut and run: it's extremely rare that a company reverse-splits only once: they RS, the price falls, they RS again, the price falls, they RS again ... it's a death roll.