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Technology Stocks : ACII - AmeriChip International, Inc.
ACII 25.24-0.2%Nov 6 3:34 PM EST
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To: skybuilder who wrote (4415)8/1/2007 5:50:38 PM
From: ciajim  Read Replies (2) of 4616
 
How the reverse works, with some hypothetical numbers

a: there are 1,000,000,000 (one billion) shares authorized
b: you own 10,000,000
c: your stake is 1.00% of the company

now the reverse split happens

aa: there are still one billion shares
bb: you now own 1,428,571
cc: your stake is now 0.143% of the company

is the company all of a sudden worth any more or less? no.
is your stake in the company (not to be confused with the value of your shares) all of a sudden worth more or less? yes.
it doesn't matter that the shares haven't been issued yet.
it doesn't matter that the share price adjusted up the same as your share count adjusted down.
you now own a smaller percentage of the company. and a smaller piece of any future profits.
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