More stock splits at Seaway Valley (encore version)

Yesterday, Tom Scozzafava – CEO of Seaway Valley Capital Corporation, and owner of North Country firms Hacketts, Alteri’s bakery, and Sackets Harbor Brewery – executed yet another reverse split of his Seaway Valley stock. This time, it was 1:1000, meaning if you owned 1,000 shares in Seaway Valley (SWVL on the pink sheets), now you own one share.

Last week, Scozzafava did a 1:50 reverse split on his spun-off Hacketts stock (HCKE, now HCKI).

Companies do reverse splits to boost the value of their stocks and attract new investors. In some cases, it’s a normal way of doing business and building capital. But reverse splits are most often seen as warning signs. Given Seaway’s massive debt load and recent history, this has to be seen as the latter. Scozzafava executed two reverse splits (1:5 and 1:1000) in 2008; the stock nevertheless still sunk to hundredths of a penny in value.

One former Seaway Valley investor e-mailed me to say he calculated the current value of a one original share of Seaway Valley stock (which would have been purchased in July 2007)….

Try to wrap your head around this number: .00000000002