A Reverse Split (RS) by example: You bought 1 mil
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A Reverse Split (RS) by example:
You bought 1 million shares at 0.0001 = $100
The company decides to split 1:1000
The new PPS is 0.1 and you have a 1000 shares = $100
This doesn't cost you a penny but companies do a RS so they can start raising money (diluting again) from 0.1 in this example. And from that point on you start to lose money as the share price decreases.
Hope this helps you out a bit... if not, read it again ;-)
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