Stock split 101-
"There are essentially two forms of a stock split. The two forms are:
Regular Stock Split: This is an event that increases the number of outstanding shares by a factor of X, but then divides the share price by that same factor. For example, a 2-for-1 stock split will double the number of shares in a company, but will simultaneously divide the price of each share, (reduces its share price) by that same factor of 2, to compensate. Thus, if a stock is $20 a share, and you own 100 shares before the split, you will then have 200 shares at $10 a share, after the the 2-for-1 stock split.
Before the Split: 100 shares at $20 per share
After the 2:1 Split: 200 shares at $10 per share
Reverse Stock Split: The exact opposite occurs with a reverse stock split and it is usually a higher numbered ratio to help very low-priced stocks achieve higher pricing. An example would be a 1-for-20 reverse stock split, where you might own 20,000 shares of a stock currently priced at $1 a share. After the 1:20 reverse split, you would then own just 1,000 shares, but they would each now be valued at $20. Preventing De-Listing: This is the scenario when a stock is threatened by the NYSE for example, to be de-listed because its share price is too low.
Before the Split: 20,000 shares at $1 per share
After the 1:20 Reverse Split: 1,000 shares at $20 per share" - Copyright © 2010. StockHomework101.com
So with that short tid bit of education, the actual Reverse split doesn't change the net of what your stocks are worth as a whole, it simply rearranges the method to which it adds up.
You could have two .50 cent stocks that equal $1 or have one $1 stock that equals $1.
What everyone is worried about is what happens after the Reverse split. How will the market respond to the reverse split?
Which market place does the new stock get placed in? What kinds of investors/brokers/funds/etc will be interested in the stock now that it appears to be worth more?
What the company hopes to get out of this is a reduction of stocks available on the market so it doesn't appear like our stocks are worthless. Think of it in terms of pennies. Do you want 100 pennies or do you want $1 dollar bill.
I'm all for the Reverse Split, and have faith it will result in good things. Just have to be patient and let the new executive management do their jobs, which I feel they are doing a great job so far.