In theory you're completely right, in practice however results are very different. I would hazard to guess that over 90% of all companies that do reverse splits continue on a downward spiral, many to oblivion, or at least additional reverse splits because they're viewed as a big negative. Of course if really positive news comes later, the price corrects.
Splits on the other hand are viewed extremely positively. In prior decades, splits often occurred as companies approached triple digits, but today permitting share prices to grow into the hundreds of dollars has become a status symbol for companies like Apple, Google, etc.
In theory, companies kept prices where investors could easily trade in 100 or 1000 share increments. Frankly I'm amazed at how many 100 share trades are made in AEZS, even with the cheapest commission rates on a percentage basis you have to be up substantially if you buy then sell 100 shares just to break even. I would suspect that many trades are computer driven, and those trading that way don't pay the commissions you and I do. Frankly, I wish this sort of market manipulation was stopped, but it's currently legal.
Remember, it hasn't been that long since 1/16th of a dollar was the smallest spread between bid and ask for most stocks. Often the spread was as great as $.25. Today we often see spreads of $.0001 between bid and asked and still no shares are being traded. My brokers won't let me put in a bid at 4 or even 3 digits, yet computers trade on my offer and generally get the stock at a price that's tenths or hundredths below my offer, or sell it for the same increment above. What difference does it make to me, it's insignificant.
Someone just bought and/or sold 100 shares of AEZS at .4948, that's $49.48. If this were an individual buyer, would they really not buy the stock for $50. After commissions they probably paid over $55 and if they sell and pay commissions they'll need to get over $60 for those same 100 shares to be even. My point is that investors don't need $.0001 trading or even $.001 for stocks trading above about a dime. While $1/16 was probably a larger increment than what was best for markets, a penny is really as small as most stocks should trade for until their price is below some established value. It's time for people to take control back from the computers.
Gary
