Well thats just not correct, to say "has not done anything good to any company".Reverse stock split reduces the number of shares and increases the share price proportionately. For example, if you own 10,000 shares of a company and it declares a one for ten reverse split, you will own a total of 1,000 shares after the split. A reverse stock split has no affect on the value of what shareholders own. Companies often split their stock when they believe the price of their stock is too low to attract investors to buy their stock. Some reverse stock splits cause small shareholders to be "cashed out" so that they no longer own the company’s shares.
A R/S on a good company in a positive growth pattern can be done to move the PS up and out of Penny Land for a move to the BB, most large investors will not pay attention to stocks at this low PS. Your statement might apply to "scam stocks" on the way out, but can be a very different story for a solid company trying to move up.
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