You've finally done it! You've scrimped and saved and you're finally ready to invest in the stock market.

Actually, you've pretty much just saved, because you really don't know what "scrimping" is. Now that this little hole in your vast body of knowledge has become apparent, you're very troubled. What to do? Grab hold of a dictionary? (Nah, too heavy. You pulled a muscle just yesterday lifting the instructions for operating your fancy new phone.) Use an online dictionary, because it's so convenient? (Good idea, but you're not at home or at work, and thus are disconnected from cyberspace. You're actually in the analog world, for a change.)

Well, there's one good alternative left -- a reference librarian! Huh? Isn't this a bit extreme? Actually, no, since you happen to be in your favorite library, and you know that this particular reference librarian is always willing and eager to help answer people's questions. She's a bit strange, though, wearing funny velvet hats with lots of little bells. You thought librarians were supposed to be kind of quiet, but this one stirs up quite a racket.

So, off you go to see Ms. Fool, to ask her what scrimping is.

"Scrimping!" (Again, you find the decibel level of her response a bit unusual for a librarian, but what the heck.) "Scrimping is being sparing or frugal."

Satisfied, you set off on your way back to your seat, when all of a sudden, out of a dark row of shelves (the Pet Grooming section of books, oddly enough), you hear the Whisper.

"(Psst!) You looking for a good stock?"

A little taken aback, you answer honestly. "Why yes, I am."

You hear pages rustling in the gloom of the bookshelves. The Whisper is connected to a compelling male voice.

"Well, take a gander at EFFLUVIUM GARDENS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ODOR)") else Response.Write("(Nasdaq: ODOR)") end if %>. It operates a bunch of recreational parks. In fact, take a look at its stock performance -- it closed at just $5 per share yesterday and it opened at $50 today! Momentum like this can't be stopped, buddy! Grab a seat on this train!"

You're a bit stunned -- torn suddenly between greed and fear. You lean against the wall, thinking this over. There is silence for a while, as you try to collect your thoughts and respond to the mysterious Whisper.

All of a sudden, your trance is broken by the delicate tinkling of bells. It's Ms. Motli Fool, the reference librarian! She was listening to this exchange and has something to say!

"Sir!" (Once more, she virtually screams, causing heads to pop up at desks across the library.) "There's a very good explanation for ODOR's ten-fold jump -- and it isn't stellar performance!"

"Oh!" you gasp.

Ms. Fool continues. "This stock has increased in value because of a ten-for-one reverse split! If you owned 100 shares of ODOR at $5 per share yesterday, today you own:

1) 50 shares, worth $2500

2) 5 shares, worth $250

3) 100 shares, worth $5000

4) 10 shares, worth $500

The answer is...

4) You own 10 shares, and they're worth $500.

Ms. Fool explains, "Knowing that the company experienced a reverse split and that the shares went from $5 to $50, you can see that it must have been a 10-for-1 split, where for every ten shares you owned, you were left with one. And in order to change the number of shares outstanding without changing the value of investors' holdings, the share price had to be increased ten-fold.

"Yesterday you owned 100 shares at $5 each, giving your holdings a value of $500. Today, you own 10 shares at $50 each. The value is still $500. Many people are familiar with regular splits, which increase the number of shares owned, and decrease the value of each share proportionately.

"Why do companies split shares? Well, usually they want to increase the number of shares outstanding so that more individuals and institutions can buy them. When a share price seems too high in the minds of many investors, lowering its price via a split can make some sense. After all, if quickly growing companies like Microsoft never split their shares, each share would be worth thousands of dollars -- hardly affordable for the average investor.

"Companies that find their share price too low occasionally prop up the price through reverse splits, and that's just what Effluvium Gardens did, in an attempt to make its share price look more respectable. And generally, reverse splits are not the mark of dynamic, healthy, growing companies."

Impressed, you listen closely for a reaction from the Whisper in the shadows, but hear nothing. "Thanks, Ms. Fool," you say.

"Shhh.... Call me Motli, with an 'I'," she says.

"So, is it safe to say that you're from Southern California?"

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