Typically the reason the post reverse split (R/S) share price for a company declines is that the share price was in decline prior to the R/S. One needs to look at the underlying reasons for a company's share price to be in decline. Those underlying reasons don't magically go away with the R/S.
Now if 99 out of 100 companies that execute a R/S do so to maintain their listing because their share price is in decline, and then the share price of those companies continues to decline after the R/S. And now someone makes the superficial statement that 99% of the time share price declines after a R/S. The statement doesn't really mean anything.
Causal effect is not between the R/S and the share price decline. The causal effect is between the underlying reasons and the share price decline.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.