Here's some more info on the impact of reverse splits on share prices. This material (PDF) is from Andrew Hall who is a managing director at the Nasdaq. I received it via Christopher Chu.
While many folks on this forum expect a detrimental effect of a reverse split on a share price, Andrew Hall clearly distinguishes two separate cases:
- A stock is declining and the company executes a reverse split in order to maintain its listing on the exchange it is trading on. In this case the effect is indeed usually detrimental.
- A company executes a reverse split in order to gain a listing at a "higher" exchange. In this case the share price usually benefits from the reverse split. Andrew proves his point by 28 charts of stocks that experienced reverse splits in his material.
So it's all about maintaining or gaining. I think we don't need to discuss whether the first or the seconds case applies to POET Technologies. The reverse split is just a tool that will be used if (and only if) needed to gain the Nasdaq listing. Nothing more, nothing less, nothing to worry about. It's good to have it in our toolbox!
