Cpet, I don't believe a RS has anything to do with the "health" of a company. Also, every company is different. You just can't paint them all with broad strokes. Fuse has 200 million shares outstanding. Facebook, has almost 3 billion SO. In fact, when a company has an IPO, its valuation is really a guess.You state "if the company is any good a RS wouldn't be required to increase the PPS. People would buy the stock and the PPS would go up naturally." I disagree. If a company initially offered far too many shares in its IPO, or later offerings, it may NEVER be able to create enough revenue to warrant a value of more than .50 or a dollar a share. To establish a higher PPS, it would have two choices. Buy and retire its own shares(requires money), or have a RS.