I think some people may have been in stocks that had a r/s followed by a PP; I guess what they saw is the typical, desperate r/s type company, went from .50 to $5.00 on a 1 for 10, then the stock dropped to $3.50 and a PP was done and somehow the two get lumped together as cause and effect.

PP can just as easily be done now as after a r/s; but, if the company is not well thought of, then any PP will likely cause the stock to drop, cuz the PP itself will reveal the weakness of the company via the terms of the PP.