[logfromblammo]

A company has 1000000 shares outstanding. Mr. Z buys 500001 of them at fair market price. He then votes himself onto the board and proposes a 500001-to-1 reverse split. The measure passes with 500001 votes in favor. Everyone having fewer than 500001 shares is paid cash for their shares, while Mr. Z turns in 500001 old shares for one new one. Mr. Z is now sole owner.

Large-scale reverse splits occasionally happen in real life, as a means of forcing smaller investors off the ownership rolls.