Public Acceptance

A reverse split also helps the issuing firm overcome the stigma that comes with a low share price. If the share prices of all competing firms range between $15 and $20 and only one stock in the peer group is trading at $2, this wide gap might make investors nervous. The reverse split will not remedy the true problems. But, at the least, it can prevent the firm sticking out like a sore thumb among peers.
Certain institutional investors, such as mutual funds, are prohibited from investing in stocks that trade below a minimum price. A reverse split may help put the stock on the radar of such investors and is therefore a good thing.

References

• CNBC: Reverse Stock Splits Are Usually Good for Investors: Report
• MSN Money: Are Reverse Splits a Good Thing?
• The Motley Fool: A Reverse Split Isn't the End of the World