In an attempt to prop up their declining stock value, YTB is proposing a 1:100 reverse stock split at the upcoming annual Shareholder's Meeting.
So, what does a reverse split mean? If you own 100 shares, you now own 1 share. YTB is seeking approval from the shareholders to do this split. But the approval will not trigger the split. That is triggered when the company executives decide to trigger it. They just want approval to do so when (and if) they feel it is the right time.
The reasoning YTB gives for this is that many investors are forbidden to bid or buy stocks that are trading as low as YTB's stocks are trading because they are very risky. It is their hope that by reducing the number of shares, that the stock price will actually increase and attract a whole new audience of investors looking to invest in YTB. Of course, the opposite is also true.
Since it seems that YTB Zam Zuu is back to their old games with income claims, travel perks and bonuses, it is quite possible that there will be another investigation which will take the stock even lower. Other events can also happen that will drive the stock lower including continued dismal financial performances, additional lawsuits or settlements, or the refusal of having the Class Action suite thrown out.
It's a risk for sure, but with the strange deal they made for the Headquarters building to avert another lawsuit and repossession from FH Partners, they need to do something to get some money in the door.
In separate filings, Coach, Scott and Kim all forfeited stock award bonuses for the second year in a row due to the dismal financial performance of the company.