Consolidation may entail a 10:1 or a 20:1 (or any other number the management decide) consolidation of shares.
In your case if it was a 10:1 your holding would be 4,000 shares instead of 40,000. In theory, the share price should also go up by 10 times (to roughly $2.50 on current prices). The total value of the company (or market capitalization) should not change which is calculated by number of shares multiplied by share price.
The only benefit that I can see is that the incremental moves of 0.5c at a SP of for example 20c result in a move of 2.5% which can be enough for day traders to play havoc with the stock where there are a large amount of shares on issue and liquidity is there. At $2.00 a share price move of 1c is only 0.5% and therefore less attractive to traders trying to move the market.
If you are a long term holder it really should make no difference as the eventual value of the company will be reflected and your percentage of the shares will remain the same (assuming no new issues).
SDL Price at posting:
24.0¢ Sentiment: Buy Disclosure: Held
