FAQ
Plain-English answers about reverse splits, dilution, and the patterns we document.
Why did my stock drop after the reverse split?
A reverse split raises the price per share but does not change the company's value. If a 1-for-10 split raised the share price from $0.20 to $2.00, you now hold one-tenth as many shares at ten times the price. The market cap is the same. What usually happens next: the share count continues to grow as the company issues new stock to raise cash, and the price continues to fall. In our dataset, the median stock falls another 25% in the three months after a reverse split.
The chart looked like a huge spike — shouldn't I have bought it?
That spike is what we call a distribution auction. During a typical run week, more shares trade than exist in the float — sometimes 7 times more. The price rises because buyers are arriving; it collapses because the people who needed to sell are finished. By the time the move is visible on a chart, the exit is already happening.
Is this illegal?
The financing structures documented here are legal. Registered offerings, convertible notes, and reverse splits are all disclosed in SEC filings. The question the site answers is different: do these structures produce predictable patterns that retail investors are not aware of? The data says yes.
Who are the financiers, and why do they keep appearing?
A small number of specialized funds provide capital to companies that cannot raise money through conventional channels. The terms typically include the right to convert debt to equity at a discount, or to exercise warrants at fixed prices. This creates an economic incentive to sell shares. We document who signed which agreements using public EDGAR filings — not what they intended, only what the documents say.
My stock has a going-concern warning. What does that mean?
A going-concern warning means the company's auditors are not confident the business can continue operating for the next 12 months. It appears in 10-K and 10-Q filings. In our dataset, going-concern language precedes a documented run by a median of roughly 9 months. The warning is not a prediction of a run — it is a marker that the company is under financial stress and likely to take the kinds of actions (further financing, reverse splits) that the machine requires.
How is the "current phase" determined?
Our nightly pipeline classifies every tracked ticker using a rule-based system trained on the historical cycle. Beaten: recent large price decline. Silent: volume below the 10th historical percentile. Coiled: post-split, volume compressed, price below the split price. Armed: coiled + fresh supply registered (S-1 or 424B in last 90 days). Running: price and volume breakout signature active. Crashing: post-peak, price declining from run high. Phase classifications are probabilistic, not predictive.
Why does the share count keep growing even after a reverse split?
A reverse split reduces the outstanding share count on the day it happens. But if the company continues issuing new shares — through ATM offerings, warrant exercises, or convertible note conversions — the count grows back. In some cases it exceeds the pre-split count within months. We track share counts from SEC XBRL data, reported with each quarterly filing.
Can I use this data to short these stocks?
This site does not give investment advice. What the data shows is that, historically, stocks in the post-run Crashing phase continue to decline — the median loss is 30–48% over six months. Short selling microcap stocks involves significant additional risks: borrow availability, borrow cost, and the possibility of short squeezes during manufactured runs. The site documents history; what you do with that is entirely your decision.
Can I trust the AI answers?
The AI only speaks from that ticker's documented record — splits, share counts, SEC filings, and recorded runs. It refuses questions that fall outside that record. It can still make mistakes, so treat it as a reading aid for the filings, never as advice. Every underlying number the AI draws on is shown on the ticker page and available in full on EDGAR.
Have a question not answered here? Contact us. We commit to investigating and responding to data disputes within 72 hours.