All those numbers are really muddying the waters, but I suppose that's par for the course with stock splits.
The bottom line is much simpler: before and after a forward or reverse split, everyone has exactly the same share of the company as before. The rest is just an accounting fiction.
Granted, the exchanges enforce some of that fiction with their minimum share prices, and of course in the old days when shares were often traded in blocks of 100 it made a difference in how small a trade you could make.
But aside from that, it's still a fiction.
A reverse split is like saying "So you want to buy some pie? I was going to sell you 16 huge slices, a full quarter-pie each! But I changed my mind. Now I will only sell you four pies."
In other words, it's a psychological/educational problem, not a financial one. The only people truly affected by the splits you described are those who don't understand splits work.
Granted, this problem can be a real one. I had a friend who celebrated with joy any time a company whose shares he owned did a 2 for 1 split. He was certain that the shares would almost immediately climb back up to their previous price, because that was the natural share price for the company.
I tried to explain to him that he had exactly the same share of the company as before and the split didn't affect the company's financials in any meaningful way, but it just never sank in. He bought companies that had a habit of splitting their stock, and avoided companies that just let their share price rise.
The stock reports on the radio certainly don't help with this: "X co is up $6.51 at $327.90, and Z co is up 55 cents at $14.23."
The bottom line is much simpler: before and after a forward or reverse split, everyone has exactly the same share of the company as before. The rest is just an accounting fiction.
Granted, the exchanges enforce some of that fiction with their minimum share prices, and of course in the old days when shares were often traded in blocks of 100 it made a difference in how small a trade you could make.
But aside from that, it's still a fiction.
A reverse split is like saying "So you want to buy some pie? I was going to sell you 16 huge slices, a full quarter-pie each! But I changed my mind. Now I will only sell you four pies."
In other words, it's a psychological/educational problem, not a financial one. The only people truly affected by the splits you described are those who don't understand splits work.
Granted, this problem can be a real one. I had a friend who celebrated with joy any time a company whose shares he owned did a 2 for 1 split. He was certain that the shares would almost immediately climb back up to their previous price, because that was the natural share price for the company.
I tried to explain to him that he had exactly the same share of the company as before and the split didn't affect the company's financials in any meaningful way, but it just never sank in. He bought companies that had a habit of splitting their stock, and avoided companies that just let their share price rise.
The stock reports on the radio certainly don't help with this: "X co is up $6.51 at $327.90, and Z co is up 55 cents at $14.23."
Which company did better today? :-)