RE: What reverse stock split means to warrants?A reverse split is always expressed in a ratio. A reverse split 10:1 means for every 10 actual shares, they will issue a 1 new share. So if you possess 100,000 shares and MB does a RS 10:1, you will have your 100,000 "taken back" and 10,000 new shares at 10 times the price will be "given back to you". That is the theory.
The problem is this : suppose you bought 100,000 at 50 cents, that makes 50,000$. Now the stock price plummets at 40 cents ; you then have 40,000$ or lost 10,000$ on your shares. Then at 40 cents, MB does a reverse split (RS) in order to make the stock price more "attractive" (many mutual funds managers aren't allow to buy shares that are under 1$). You have then 10,000 shares at 4$, that still makes 40,000$. But in order to recover your losses, the stock price must gain a whole dollar instead of only 10 cents.
That's why people tend to dislike RS. But in fact, a 10 cents rise over a 40 cents share is the same rise as a 1$ rise over a 4$ rise stock (both are a 25% rise).
Actually, stocks under 1$ (penny stock) go under tremendous speculation ; they can gain or loose up to 10 cents in a single trading day (MB gained a whole dollar last year in a single trading day about at this time of year). So you 10 cents loss can be easily recovered over a day....or can go deeper down the rabbit hole!
Also, having a stock price under the 1$ range does not give a good reputation to the company : it either means that they are starters (starters are very risky since they tend not to generate any profit in their starting years) or that the company is under severe difficulties (that was the case of MB last year). Either way, only those that are tolerant to risk or speculators invest in such stocks. Some penny stock companies in whom I have speculated last year are already bankrupt such as PPA and ORB.H.