YOu are adding to the equation.
Again, the question is "what is a reverse split and is it negative". You wrote MORe than JUST a reverse split. You ASSUMED that ALL reversse splits then have to do MORe than just htat. Let me show you <<xyz needs to raise capital so they decide to do raise money and do a reverse split. 1) They decide to do a reverse split of 500/1. If that's all they did, the company would have 1MM shares worth $5/share and you would still have $10K in your account. But 2) they sell 200M post split shares to a funding source for $1/share and 3) give the CEO and other principals of the company another additional 500M post split shares to make up for what they expect to lose by the reverse split. >>
YOu are mentioning THREE acts. The reverse split was act #1. the second two are conjecture. They MAY happen, and DO happen at times (Althought hat is a LOT of "funding money" required for a merger) but they are not part of the reverse split. Only #1 above IS the reverse split.
If you add that 4) The CEO then runs off to the caribbean and screws the company then that makes it even a aWORSE thing. But, that has nothing to do with the SPLIT. That is managment. A split is only the first item. And MANY times that is as far as they go. They do the split, raise the price, and life continues on at a higher price. SOmetimes they are shorted, as you said, and sometimes people sell them. Yes, that happened. And I agreed that a MAJORITYof hte time a stock goes DOWN after a reverse split. I'm understandint that. But, the items you mentioned as potentially happening AFTER the revers split are just that. "Potential" AND "after". They are not he split itself.
Well, my amount of posts for the day is done, so I won't repsond any more today. The free service only allows so many posts I guess. LOL. Talk to you tomorrow or the next day.