I've been doing a tiny bit of research on the topic of Reverse Splits - a topic which generates strong feelings - pro and con. I have included two links at the bottom of this post, which have discussions about NORTEL's reverse split, and CGMI's. However, one of the really interesting quotes comes from Business Week, and it is found below.

While a reverse split may help some companies avoid short-term pain, such moves can accomplish only so much. Figuring out which will survive the rough economy and which have problems that are irreparable will likely become an even greater challenge as reverse splits become an increasingly common survival strategy. The trick for investors is to focus on the company's health, not the stock's. Says fund manager Balkin: "If you believe the company is a long-term survivor, that's what you should be paying attention to."

In the end, "a split doesn't change anything about a company," says Bentley College's Rosenthal, who adds: "The question is: Is it signaling something?" Investors may have a lot more of those signals to interpret over the months to come. Business Week, July 1, 2002 - Can Reverse Splits Undo the DamageT

Therefore, the question for all SPQ investors to ask is, "How Healthy is Spider Resources?" We should be asking this question whether or not a reverse split is a good idea (or not).

In the links below, the NORTEL link is particularly interesting. It briefly deals with Management's opinions about their company. Here's a brief quote from the article:

Stock splits of both varieties appear to be part of a larger class of events in which management signals its opinions of the company's prospects.

So the BIG question for me at this time is, "How does Neil Novak feel about his company Spider Resources and its future prospects?"

At this time, Spider Resources has money for the Winter 2008 drilling program; it's in a number of JV's thereby sharing risk; and Spider is closely aligned with Nemis and NORONT. These seem to be three business facts with regards to the business health of Spider Resources. Unless the winter drilling programs, SPQ, NOT, BMK, all come up duds, I continue think the prospects for Spider are very good.

http://query.nytimes.com/gst/fullpag...

http://research.investopedia.com/new...

Snug