It might even close higher than today's closing so the foolish panicky sellers will look enen more foolish. Look at Mara. After their 13 for 1 reverse split, it closed the first day of trading post splut 7% higher. Nothing really changes except if you are a fool.
You are absolutely correct. People selling their shares right now for $1.00 are really selling @ 6.00 per new shares. Tomorrow morning this stock will open @ $7.20 per share. $1.20 (closing price) X 6 + $7.20. This stock will probably drop some. On the other hand it would be eligible to be bought by institutional funds who are not allowed by their charter to purchase any stock under $5.00. This could be good for rational patient investors in the long run.