What this is about is that most investors don't want to buy stock in companies that have an AS in the billions. This is one reason for a reverse split. A 2 billion AS looks bad. It looks like a company that has diluted their stock. So what do these companies do that have diluted their stock? They do a reverse split. It is only a math equation that is designed to make things LOOK BETTER.

The other reason to do a reverse split is so that the pps moves up proportionally to a level that is acceptable to a higher stock board. To do this it would mean audited fins are required also.

This is why a reverse split can be a good thing and it can be a bad thing. To move to a higher board they don't want to see a balance sheet with a 2 billion AS and a pps in the fractions of a cent.