I stand corrected.
First of all, the proposal was put forth because the stock is below $1/share and to gain compliance, it needs to be higher. That was solved, up until the merger.
Secondly, there's no reason a reverse split should cause the price to fall. This is not a stinky pinkie where they're doing it so they can dilute further. It may (or may not) be necessary to complete the merger.
But my point remains valid - any merger, where the public company hands 80% of it's cash to another entity, causing the public company's stock to crash, is going to become a target for many law firms who salivate at this sort of bad deal.
Honestly, it makes no difference to me if you want to say it's a good deal, but the reverse split is what makes it bad. I don't care what the reason is. At the end of the day, they're taking a company with a cash liquidation value of somewhere around $1.50 and selling that cash at an 80% discount. The existing company and facilities are being shut down. The new entity is buying nothing but cash and a ticker, and they're stealing it.
Why anyone, from the board to the majority holders would agree to this is beyond me.