How will the 1‑for‑100 reverse split affect TNFA’s share liquidity and bid‑ask spread?

Liquidity impact

A 1‑for‑100 reverse split will shrink the public float by a factor of 100, turning a very thinly‑traded penny‑stock into a higher‑priced “small‑cap” share. In the short run the daily volume will drop sharply because the same number of investors will now be moving 1/100 as many shares. Market makers, who already face limited depth in TNFA, will see a lower order‑flow rate and will be forced to quote fewer sizes. This contraction typically widens the bid‑ask spread – the quoted widths in the post‑split market are likely to be 1–2 cents higher (or ~5–10 % of the new price) than the pre‑split spread, at least until dealers can rebuild a reliable order book.

Bid‑ask spread and price dynamics

Because the split raises the nominal price per share, many institutional traders that have “price‑minimum” filters (e.g., they avoid stocks below $1) may now be able to trade TNFA. However, the sudden reduction in share count means the market depth is thin: a modest $100‑share trade can move the price more than the equivalent pre‑split $0.01‑share trade, leading to greater intra‑day volatility and a more pronounced spread. Expect the spread to stay relatively wide for the first 5‑10 trading days as market makers recalibrate inventory limits, then gradually narrow as volume stabilizes.

Actionable take‑away

‑ Don’t rely on tight execution for large blocks right after the split; break orders into 10‑20 % increments to avoid excessive price impact.

‑ Monitor the “effective spread” (difference between execution price and mid‑quote) for the next week – a widening beyond 7‑10 % suggests continued thinness and may merit a short‑term defensive position.

‑ If you’re a long‑term holder, the higher price may reduce the “penny‑stock” stigma and support a later re‑rating, but be prepared for near‑term illiquidity and a potentially higher cost‑of‑carry in the options market.