AIG Stock question, Reverse Stock Split, lost money

[mcdwgbiz]

I bought my first stocks from AIG through sharebuilder, 50 shares to be exact they were less than $1 when I bought them and for a while they were just going up so I had profit but on July 1st the reverse stock split happened so now instead of 50 shares I only have 2.40 I think and lost almost half the money, it's not much but I'm glad I did not buy $300 worth or I'd be very upset.
Question is what the hell is a reverse stock split and why did I lose money? I am ver new to stocks so I only know the very basics.
Thank you in advance for any answers
Ruben

[stockpicker321]

A reverse split, as opposed to a normal split, is when a company decides to decrease the number of shares outstanding and increase the share price. Usually, this type of split is not looked upon favorably by many investors because they feel like they have less ownership in the company. But some companies choose to perform a reverse split for reasons such as:
1) they dont want to get delisted (there are certain requirements)

2) they want their stocks to seem more attractive, esp. to institutional investors because they tend to avoid risky, penny stocks

[allangering]

You didn't lose any money as a result of the split. You lost money because you bought a stock that was dropping.
Investopedia explains Reverse Stock Split.
For example, a 1-for-2 reverse split means you get half as many shares, but at twice the price. It's usually a bad sign if a company is forced to reverse split - firms do it to make their stock look more valuable when, in fact, nothing has changed. A company may also do a reverse split to avoid being delisted.