What i learn from corporation actions, is that for every action, there must be a reason...haha...what crap im talking. Well...just recently RBS have a reverse stock split for 20 to 1 share, meaning for every 20 shares you have, it will be reduced to 1 share, of course, there will be a price adjustment.
At first, the share price will be unusually high, but if you do proportional or ratio calculation, actually it may not be better off also.
There will be implications for the corporation actions. Whether is it good or bad for the stock, you will have to ponder what is the reason or intention of this corporation action taken.
Reverse stock splits are often seen as negative corporate actions because they are a tactic used by companies that have seen their share prices fall into the $1 range and, therefore, run the risk of being delisted from stock exchanges that have minimum share price rules. For example, if a company is listed on the Nasdaq and its shares fall below $1, it runs the risk of being delisted; companies sometimes reverse split to increase share price, allowing them to continue to trade on a reputable stock exchange
Source: http://www.investopedia.com/ask/answers/06/reversestocksplit.asp
News on RBS corporation action
http://seekingalpha.com/article/105148-will-royal-bank-of-scotland-s-reverse-split-help-its-share-price
RBS Release details
http://www.investors.rbs.com/investor_relations/announcements/ReleaseDetail.cfm?ReleaseID=344152
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