I beleive the real risk of reverse split is that at 6 cents the SP doesn't have much room to fall and many investors are more inclined to hope for a higher SP rather than sell for pennies, especially if their transaction cost/share is relatively high. Reverse split the share price to 60 cents or $6 and the story changes. The SP now has lots of room to continue falling, transaction fees are less, and selling becomes more likely. I have only watched a few reverse-splits (have never owned them) and have seen one company improve while the rest continued to quickly sell off now that there was room to sell. The sucessful company was on the TSX and had to reverse split or move to the Vancouver exchange. It did additional restructuring to improve its profitability besides the reverse-split, and so the r-split was a good thing. This is an exception. I beleive most investors view a r-spit as an unwilling step companies in a bad place have to do. It is not preceived as a good thing.