Most of the time, reverse splits are done by a company that is on the way out, and possibly in danger of de-listing from the exchange. Nortel was a prime example. But this one is different. SPQ is growing up. The company has approx. 389.5 million shares outstanding, and a market cap (value) of $52.6 million. A reverse split at 1 for 10 will have 38.95 million shares outstanding, with the same market cap (value) of $52.6, but the share price, at to-days closing, will be $1.40. Unless SPQ is bought without further drilling and exploration, SPQ will need to go to the market for additional funding, most likely with a placement of Flow Through Shares. Flow through shares may be offered in the market, or placed directly with investment funds (like Middlefield, http://www.middlefield.com/mrl.htm) With a more respectable share price, SPQ may be able to negotiate a better deal.

A company's value is the Market Cap.

SPQ @ $0.14 or $1.40, Market Cap = $52.6 million

NOT @ $1.50 Market Cap = $251.8 million

At almost equal share prices (after SPQ's RS), NOT is still 5 times SPQ. Just looking at share price is misleading.

Anyway, one should invest in a company only based on its value, potential, and capable management. If any one of these is lacking, I might trade for quick gains, but not hang around. As things look right now, I think I will be around for a while.

Deke