Strategic Global Investments, Inc. (STBV)

[fliboyz]

If you are referring to the immediate increase in share price after the split, it is just an equity exchange formula to reflect the same dollar value(market cap) to the post split share structure from where it was the day before the split takes effect. And this goes for both forward and reverse splits.

For example if you had 100 shares at $1 per share price before a reverse split you have $100 total value worth of stock. So if the reverse split is 1:10 ratio, after the split you have only 10 shares but they are now worth $10 each, so you still have $100 total value worth of stock. At least until it starts trading the next day.

If you are referring to the potential of your new holdings going up in value after the split; that is only based on the concept of supply and demand. If there were 10 billion shares outstanding before a split and it was a 1:1000 then after the split there will only be 10 million shares in circulation(at least until they re-issue the shares they just took out of circulation). So there is much less supply for whatever the new demand will be. Of course the value can only goes up if the company has something good happening and nothing else changes. If someone like a toxic financier doesn't start re-saturating the market with a huge supply of new shares.

Think about five people sitting at a table with only 2 slices of pizza(small share structure) for sale. If everyone is hungry the value of pizza just went up and a bidding war will get you a premium for those 2 slices. On the other hand if you have 10 pizzas(big share structure) to auction off to 5 people and you auctioned them off you will get next to nothing because there is plenty to go around and everyone will just "wait for the next auction" and you will be hard pressed to give them away after everyone is full.

hope this helps