Elementary Lesson in Reverse Splits
Share Price = Market Cap / Outstanding Shares
--------------
---Begin
$100m Market Cap, 1B Outstanding Shares
Share Price = $0.1
Position: 1000 Shares = $100 *****
---Announcement, Execution
RS, 100:1
RS(1000) = 10
---Consequence
$100m Market Cap, 10m Outstanding Shares
Share Price = $10
Position: 10 Shares = $100 *****
--------------
--------------
The truth; there really is no difference in the stocks performance with any kind of split at all. The benefits of a split or reverse split is entirely internal to the company, and indirectly significant by exploiting the novice traders lack of education on the subject, so general perception.
Ultimately, $0.1 -> $1 is the exact same performance as $1 -> $10.
Splits and Reverse Splits are proportionately intact adjustments of the share structure.
They in of themselves really mean nothing, the only reason any of you think it does is because you don't know what the hell you're doing.
Exploiting the uneducated masses is an easy way to make good pockets of change here and there. Every now and then it's legitimate though, in this case SPNG has clear desire to be on the NASDAQ market. NASDAQ's rules basically act to normalize the companies it tracks in to a format that can more clearly and intuitively be understood for benchmarking performance, etc. The reason for many things being the way they are is not for what most of you think.
Fools.
