Range Resources - Re: RRL Stream Log - If you are an original...

If you are an original shareholder in a failed company that is planning to go through a reverse merger, you will have a chance to vote on whether to accept the merger. Since your stock is essentially worthless, voting for the reverse merger might seem to present hope of eventually recovering your investment. You will receive a certain number of shares in the new company in exchange for your original shares, but that number will be considerably smaller than the number of shares in your original holding. For example, the new company may trade 25 percent ownership for the public shell. If the new company has 100 million shares authorized, it gives 25 million to the original company's shareholders. If the original company had 250 million shares issued, each shareholder will receive one share of the new company in exchange for 10 original shares. In this example, if you owned 1,000 shares of the original stock, you would receive a certificate for 100 shares of the new stock.