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Gold/Mining/Energy : Vista Gold (VGZ)
VGZ 2.050+0.5%Jan 9 3:59 PM EST
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To: Thomas M. Carroll who wrote (334)10/27/1999 8:09:00 AM
From: Lightning  Read Replies (1) of 379
 
I think that you are confusing cause and effect. Usually, companies have to do reverse stock splits because their share prices have fallen a long way. But their share prices have fallen a long way because their underlying fundamentals are rapidly worsening. In a perfectly rational world, a reverse split would not change the underlying value of the company any more than a regular stock split. However, some people may think that $1/8 times a 100 million shares is less risky than $1 times 12.5 million shares (they conclude falsely in the second instance, you can drop all the way from $1 to $0 but $1/8 is already almost zero).
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