GMX Resources Announces Approval by Shareholders of Reverse Stock Split Proposal ($GMXR)

Press release today,

"On November 29, 2012, GMXR (the 'Company') held a special meeting of shareholders in Oklahoma City, Oklahoma (the 'Special Meeting'). At the Special Meeting, the shareholders approved a proposal to grant the Board of Directors of the Company discretionary authority to amend the Company's Certificate of Incorporation to effect a reverse stock split of the issued and outstanding shares of the Company's common stock, par value $0.001 per share (the 'Common Stock'), such split to combine a whole number of outstanding shares of Common Stock in a range of not less than five (5) shares and not more than thirteen (13) shares, into one share of Common Stock at any time prior to January 31, 2013 (the 'Reverse Split Proposal').

The Board of Directors of the Company has not yet determined the number of shares of Common Stock to be applicable in the Reverse Split Proposal or set any date to effect the reverse stock split, but the Company expects to effect such split prior to January 31, 2013 when determined and approved by the Board of Directors."

I still think that the company is going to do the $30mm refinancing deal pretty quickly, which will result in 16mm new shares being issued and possibly blown out into the market. (Why wouldn't the recipients just sell them? At a minimum, they could just sell them and move higher in the capital structure, perhaps buying the 2015 notes at a YTM of ~40%.)

That implies that the stock is currently overpriced, especially considering that the reverse split will make it easier to short.