Free shares are for example:
you buy 1000 shares @ $1 today (cost $1000), the share price increases to $2 tomorrow at which time you sell enough ( 500shares)
to recoup your intial investment and then RIDE the remaining 500 FREE shares for as long as you feel comfortable.
A reverse split ,commonly seen as R/S 1/50, 1/500,etc ..is for example:
you buy 1,000,000 shares @.01 ( cost $10,000), company ( DAILY LIST @ OTCBB) announces a 1/1000 RS effective tomorrow ,which means tomorrow you will have ONE share for every 1000 you had the day before.
now you have ONLY 1000 shares , but the price per share has increase by 1000 fold to $10, so in essence its still worth the same,but usually trades down substantially almost immediately.
most view reverse splits very negatively, as they are usually done to make way for toxic financing and wipe out last seasons bagholders while preparing for the next pump job.
