A reverse split analogy
Some will decry it of course, but it's apt regardless.
The congress of the United States has been debating tax increases vs. spending reduction. One would think with plenty of HISTORY to examine there'd be no debate. Even so....
Today the talk is "compromise", that is, a combination of tax increses "in exchange for" spending reduction. The problem is, history demonstrates this compromise doesn't work in creating the desired change, but moreover is never ahered to. That is, the spending reduction never actually happens - only the tax increase.
I have seen RS work... but only once. When it did work, the company went into an extremely conservative fiscal mode particularly regarding shareholder (share) value. In all other cases, I would argue that because there was zero change in monetary governance (spend - overhead) the stock value dropped and never recovered.
Using the US government analogy again, you'd expect to hear that the the reason the RS didn't work is that the didn't split the stock enough!
I'm against an RS becuase I barely trust myself to do what's right. I don't trust anyone else to even remotely do what's right. There needs to be a stated plan and policy, a system of accountability, then execution. Anything short of that means those who advocate an RS might as well dropkick their shares off a cliff.
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