Talk about voodoo economics!
Merisel, on a downward slide ever since it overspent on Datago affiliates years ago, is back on the map as far as the stock market goes. The companys stock hit almost $2 recently after falling to about 12 cents. Whats responsible for the upswing? A reverse stock split. The companys board of directors agreed last month to exchange 10 shares of Merisel stock for every one share, reducing the number of outstanding shares from 80 million to 8 million. (It also changed its Nasdaq symbol from MSEL to MSELD, then back to MSEL again.)
Given its recent high, thats a 67 percent increase in the value of the stock at a time when most stocks have been getting hammered. But its a truly strange way to run a business.