That's not how it works.
If I bought 10,000 shares, pre-consolidation, at (say) 10 cents per share, that's $1000 worth that I've spent on shares that are now worth $340. The consolidation will reduce the number of shares I hold to 1,000; but the value of each share will be ten times as much - my holdings would still be worth $340.
The net result for me would be no change. The share price would still have to (approximately) triple for me to recoup my money. The fact that it needs to triple from 34 cents to $1, instead of 3.4 cents to 10 cents, is irrelevant; the percentage movement is still the same. There's no dilution effect, no loss of equity. It's no harder to recoup one's losses with the company post consolidation than it is before.
There is a psychological effect, in that people perceive something that's worth 34 cents as being worth significantly more than something that's worth 3.4 cents, even though the chunk of the company that 34 cent thing represents is ten times as large as the chunk the 3.4 cent thing represents, making them equivalent. But financially, there's no difference.
Those who hold a number of shares that doesn't evenly consolidate will end up with slightly more than they had previously (so if you have 20,003 shares now, you'll end up with 2,001 shares after - effectively getting 7 pre-consolidation shares for "free"), but the percentage effect is going to be small.
I tend to be a little skeptical of consolidations: they make no material difference to the company one way or the other, and tend to be much more about appearances than about actually making things better for shareholders. I don't see them as materially increasing the downside risk, in the sense that the share price could still, pre-consolidation, go down to 0.1 cent per share (a drop of around 97%); but I also don't see them as changing the upside potential. If it gets to the point where the share price is down below 1 cent, then yes, a consolidation makes sense (because the steps in price become very broad at that point), but if the share price is that low, I'd want to see something more than just a consolidation to resolve the underlying issues that led to the share price falling that far.
In other words: I view consolidations as something that need to be accompanied by actions to change the downward momentum on the company's perceived value. On their own, they are little more than a distraction from the problems, and certainly won't change things either way.
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