# MIL - Magnesium International



## Jon Doe (6 February 2005)

Magnesium International Limited will be holding a General Meeting at the end of Feburary which one of the resolutions is the consolidation of it's share capital on a 1 for 20 basis considering a pre price of $0.06 and post price of $1.20.

At the moment, I am of mixed opinions of the consolidation going ahead as this company is still considered a 'speculative stock' and I beleive that there will be more pressure to maintain a price of $1.20 as compared to the current price of $0.06.

I understand that this site is not to be used for the purpose of financial advice and would just like to discuss this for the purpose of opinion.

Cheers,


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## dutchie (6 February 2005)

*Re: Magnesium International Ltd - MIL*

Hi Jon Doe

In theory there should be no difference in the desirability of the share -  it would still have the same quality.

However some people may think that the 6c share is better in that a 1c increase in a 6c share is a gain of 16.7% but a 1c increase in a 120c share is a gain of only 0.8%.

But if a 6c is worthy of a 1c gain then a 120c share under the same circumstances/conditions/etc deserves a 20c gain
- so there should be no difference.

The dividend (if any) on a 6c share would also be multiplied by 20 if the shares were consolidated to 120c.

Thats the theory but there would probably be some small anomalies (that could not be measured, as the two systems can not run at he same time).


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## Jon Doe (6 February 2005)

*Re: Magnesium International Ltd - MIL*

Hi dutchie,

I agree with all the mathematicals that you mention, it is just my concern that this company is still in the very early stages as they haven't even begun construction of the smelter and will most likely not even have any product for a number of years to come.  I can see where they are coming from in relation to the consolidation, but I think that they maybe a little premature.  From my experience in the share market companies such as this one need to keep as much of the market interest as possible. Being one of the 'cent' stocks the stigma seems to be that you can invest very little to obtain a decent share exposure and although you can spend the same consideration and obtain 'same' exposure at the consolidated price, this particular company compares more favourable with other 06c shares than with $1.20 companies that are generally operational and generating profit.

I'm probably going to be proved totally wrong if the consolidation is aproved at the General Meeting, and I sure hope that I am, but to date the company hasn't spent much time below 5 cents so lets hope that it can maintain a price above the dollar...


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