Please tell me if my understanding of this is correct.
We will have a reverse split of one share for 10,000 shares. Meaning, if you owned 1 million shares you will then I own 100 shares. The value of the shares after the split will be 10,000 times greater than they were before the split. That will mean if they use 0.0005 as a starting point then the new value would be $5 per share.
Correct so far?
Why do companies do this? For a couple of reasons. One is so they can continue to dilute the stock and make money. Another reason is so they can up list the company on a major stock exchange which you cannot do at sub penny levels.
Of course if everybody sells and no one buys after the R/S, then we lose our ass.
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