RE:R/Shttps://www.nerdwallet.com/article/investing/reverse-stock-splits
Positive. Often, companies that use reverse stock splits are in distress.
But if a company times the reverse stock split along with significant
changes that improve operations, projected earnings and other information
important to investors, the higher price may stick and could rise further.
In this instance, the reverse stock split was a success for both the company
and its shareholders.
Negative. If the company doesn’t successfully improve its operations along
with initiating the reverse stock split, its stock price could continue to slide,
sparking even more concern over the company’s fate.
https://seekingalpha.com/article/4454657-reverse-stock-split
Pros and Cons of a Reverse Split
Pros of a Reverse Stock Split
Boost image: The primary purpose of a stock split is to increase the share price, which is often done to gain or maintain favor among influential investors.
Prevent stock exchange delisting: A reverse stock split can be done to increase the share price to meet minimum price requirements of the stock exchanges.
Cons of a Reverse Stock Split
Loss of liquidity: Since a reverse split reduces the number of shares available in the market, the split can harm liquidity, which can then negatively impact share price.
Negative perception: Although a reverse stock split can help to boost a stock's image among investors, reverse splits are often received as a negative sign that the company is struggling.