Rookie from my experience some of the well known companies like lvlt and citi have done RS and held up ok but the smaller companies with no past earnings dont hold up as well. Its purely an accounting treatment as is a forward split. Stocks often rally on a FS and there is no good reason. Yes more people can afford cheaper shares but their ownership hasn't changed. RS sort or ruin the technicals of companies. For example, if DROP has a current support of $.20 and does. 5 to 1 RS then shares would now be a $1.00. Im fairly certain that the stock won't hold $1 now so the technicals and support levels change.
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