Low, you're preaching to the choir here :-) I posted the investopedia entry because it says an RS is usually a bad sign if forced to RS and " . . .in reality nothing changes". RS has a stigma which I don't think has a basis in fact. Those companies that RS and fail were probably failing long before the RS was done. For example, the RS is done to avoid being delisted. In GTEL's case, it was part of the move to get listed on AMEX. Also, over on the info board, there are several postings that identify companies that went on to success after an RS.
Let's just say that at the time of the RS, you have a 1000 shares at 0.25, which is equal to $250. After the RS you will have 66.66666667 shares at 3.75 which is still equal to $250. Further, if you are currently speculating on a doubling of the market captalization with a share price rise to .50, after the RS, you would be speculating a SP rise to 7.50. Now some might say it would be alot easier to go from .25 to .50 than 3.75 to 7.50, but that's just perception, isn't it? In both cases, if stock price doubles and market capitalization doubles.
Btw, I do understand that perception plays a role in the market. I think non reverse stock splits, such as we have seen over the years with microsoft, are done to provide an appearance of "affordability" when in reality, it changes nothing . . .
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