Do a search on Google for the search phrase "reverse split" and your browser will load up thousands of articles written on the subject. For the most part, these articles echo the same story, that reverse splits reflect negatively upon a company and its stocks and that companies that perform reverse splits are destined to fail.

Do a search on Google for the search phrase "stocks that had a reverse split -aig", click "Show Options", then click "Recent Results" and links then point to news about companies that either recently announced that they were going to do a reverse split or that had recently gone through the reverse split process.

It's not rocket science to get the information you need to make a sound decision. By simply investigating the companies in the links returned by Google, I discovered that many (most) of those companies were not negatively impacted at all by their reverse splits. Some of their stocks actually appreciated in value immediately following the reverse split and they were able to hold their new pps positions with somewhat relative ease.

• Coeur d'Alene Mines Corporation performed a 1:10 reverse split on May 26, 2009.
• Time Warner Inc. performed a 1:3 reverse split on March 27, 2009.
• Assisted Living Concepts, Inc. performed a 1:5 reverse split on March 16, 2009.
• According to FindArticles.com, Emrise Corporation performed a 1:3.75 reverse split on November 19, 2008.
• Domtar Corp (USA) performed a 1:12 reverse split on June 10, 2009.
• Claymore Dividend and Income Fund performed a 1:5 reverse split on June 4, 2009.

These are just a few of the companies that performed reverse splits in recent times. None of these companies' stocks were negatively impacted by their reverse splits. I didn't have to search hard to find them, and I only discarded two companies in my search because they did perform poorly following their reverse splits: AIG and General Motors.

Reverse splits aren't the end for stocks - not unless the stockholders say it's the end. Stocks that do perform poorly after a reverse split are usually the stocks that are hammered by stock bashers and short sellers looking to make a quick fortune the weaknesses and fears of stockholders. And they are the stocks that were already preparing for a collapse long before the reverse split due to gross financial and business mismanagement.

For those stocks that have potential - those that have good or strong investor sentiment - a reverse split could be nothing worse than a 5-inch high speed bump. A reverse split could also be a blessing in disguise, preparing the company for the next crucial step in its journey towards success for them and their stockholders.

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