Why Would a Company Undergo a Reverse Stock Split?
Reverse splits are usually done when the share price falls too low, putting it at risk for delisting from an exchange for not meeting certain minimum price requirements. Having a higher share price can also attract certain investors who would not consider penny stocks for their portfolios.
Usually after a reverse split the stock falls but only for 3 years:0)
Do stocks drop after reverse split?
The study, conducted on behalf of the Financial Management Association International, found a "significant downward price drift and significantly lower earnings and operating cash flows" in the three years after a company's reverse stock split.
from an uneducated fool
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