Originally Posted by
bigred52
A reverse split is when a company tries to increase the (perceived) value of
the stock by decreasing the number of shares on the market.
Example ---say you have 1000 shares of widget inc at 1.00 dollar apiece
a reverse split of 5 to 1 would mean you would have only 200 shares
but the value would be 5.00 a share. Usually only weak companies
try this as usually the value of the new shares usually goes down. Some splits are for every 2 shares you now have 1 etc. There is no set
ratio. Reverse splits are almost always BAD NEWS