No that's not quite how it works and I'm sorry for
Post# of 29251
What happens is, let's say the stock is worth a penny and they do it 10 to 1 reverse split you have a hundred shares worth a penny each.
With the 10 to 1 reverse split now you have 10 shares worth a dime each .....
same exact value just less shares.
So every time a company does a reverse split all they do is reduce the number of shares that are out there... The value of the shares remain the exact same...
if you have 1000 shares and they do 1000 to 1 reverse split now you have one share but it's worth the exact same thing as your thousand shares were worth.
So what happens is, it looks like the share price has drastically gone up which allows for a shitload more dilution even though it's at the same exact price people are able to dump their shares without crashing the stock.
Then .... (and picture this) now with people dumping their shares or diluting,
The stock starts to fall now you're one share that was worth a dime starts to drop in price. It's definitely the start of a death spiral. It usually signals that the company cannot do anything except reduce the number of shares out there for a last bastion of Hope. It's not good.