Behold a lesson in magical "value creation":
- SPAIN'S BANK RESCUE FUND TO VALUE BANKIA SHARES AT EUR 0.01 - As a reminder, Bankia is the recently broke bank that was created when it subsumed a bunch of other formerly broke banks.
- SPAIN BANK FUND AIMS FOR NOMINAL BANKIA SHARE VALUE OF EUR 1.00
- SPAIN'S BANK RESCUE FUND TO DO REVERSE STOCK SPLIT OF BANKIA STOCK
- SPAIN BANK RESCUE FUND SAYS BANKIA SHARES WILL BE WORTH EUR 1.00 AFTER 100-TO-1 REVERSE STOCK SPLIT
To explain for those confused: you start with a broke, literally, bank. You value the "equity" at the lowest possible increment in existence. Then you apply a reverse stock split. And finally, you end up with a perfectly solvent bank whose stock trades at EUR 1.00/share.
Financial magic and pristine solvency, European style.