If the shareholders vote for a 1:20 reverse split, 1 million shares will become 50,000 shares. A price of .0001 will become .002. So in that scenario, 1 million shares at .0001 would now be 50,000 shares at .002, and 10 million shares would be 500,000 shares, and so on.
Generally, reverse splits don't end well, because the lower share count means that the company may see an opportunity to then issue more shares. If this company has 3 billion outstanding shares now, that would change to 150 million, which may get them thinking about issuing shares increasing it towards one billion. Who knows for sure. This would be my hesitation with buying any more shares.
But first, from what I'm hearing, it would have to be voted on and approved by the shareholders, so the reverse split wouldn't happen for awhile, if at all.
Anyone care to add to or discredit anything I'm saying? I'm at 8 million shares and would fall to 400,000 in the proposed scenario. As others have pointed out though, at least we know they have a pulse. I'd be very hesitant to buy any more in a reverse split, and I don't think I would, but would hold.
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