Investors aren't stupid and realize a company doing a reverse split just to maintain the minimum share price is doomed.
See also: $HMNY.
See also: $HMNY.
HMNY didn't really tank because they did a reverse split. They primarily tanked because they continued to dilute investors after their reverse split by issuing new shares and selling them to the public markets via their ATM offering.
Reverse splits cause further depression in share price, but pretty much any example other than HMNY would be better. i.e. Price dropping by 1000x after a split is not typical at all.
It gives an excuse to make an article and recap the events that lead to this situation. As someone who didn't follow this story closely it's useful to have this bit of context.
It's actually not symbolic at all, it's a very real (negative) milestone that has ramifications for the company.
> You'll get delisted from the NYSE if you fall below $1/share or below a certain market cap for more than 30 consecutive trading days.
It's actually a pretty big deal for Blue Apron.
wow we've come full circle from my parent comment
Passing below the $1/share marker is a forcing function (i.e. it's not arbitrary at all) for the company to make significant adjustments, as opposed to the plethora of companies that trade in the $1-$10 range who can continue plodding along. BI's audience is one that's mostly aware of this fact, so that's why the article is about that "arbitrary" price marker - it's a sign of major changes incoming rapidly.
So, I guess I'm not really sure what your point is. "Just do a reverse split" is like saying "just declare bankruptcy" or "just charge more money" in that it glosses over the consequences of those actions greatly.
Narrator: You can.
The point that it is a valid option and your point is that it has consequences. Not mutually exclusive.
Being punted to the Bulletin Boards or Pink Sheets has worse consequences for some of the investors who literally can't hold it anymore, thats a greater consequence than their opinion on a reverse split.