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Thursday, August 09, 2012 2:18:15 PM
Lets not forget reverse stock splits can be executed in multiples 2 :1 , 4:1 , 8:1 , 20:1 etc......So the share count immediatley drops and you have some fraction of your shares when its completed. So literally with the swipe of a pen the 1.5 billion shares everyone has been talking about about would be dramatically reduced to "X" overnight.
So for our example our .0005 today at 20:1 RS would be .01..VOILA we are at a penny with only 75,000,000 shares outstanding BUT you would own 1/20 th your current share count....article below mentioning success stories with RS ...
http://seekingalpha.com/article/259359-some-reverse-stock-splits-actually-do-work
From Wiki
As an example of how short splits work, ProShares Ultrashort Silver (ZSL) underwent a 1-10 reverse split on April 15, 2010, which grouped every 10 shares into one share; accordingly, this multiplied the close price by 10, so the stock finished at $36.45 instead of $3.645. On February 25, 2011, ZSL had a 1-4 reverse split (every 4 shares became one share, which multiplied the close price by 4, to $31.83). Because of these two actions, one share of ZSL as of February 26, 2011 represents 40 shares of ZSL before April 15, 2010. These splits were necessary to maintain the price of the fund, whose value fell 90.2% from April 15, 2010 to April 21, 2011, and over 98% since December 3, 2008. Had the reverse splits not taken place, ZSL's closing price on April 21, 2011 would have been $0.3685, rather than $14.74, or .3685*40.
I am stupid, do not pay attention to me or my posts...do not make buying or selling decisions based on my banter at all ...I am a negative person by nature and at best an amature investor. Hope everybody makes money here.
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