It may look like a zero-sum game, but it's actually not. On March 17, Pre-Paid Legal (NYSE:PPD) shares will go through a 1-for-100 reverse split, followed immediately by a 100-for-1 forward split. Blink and you'll miss the stock's seemingly pointless round-trip from $35-ish to $3,500-ish to $35-ish again.

The instantaneous 360-degree spin won't matter to investors, unless they happen to hold fewer than 100 shares in the legal services provider. The move will effectively force all of Pre-Paid Legal's odd-lot investors to be cashed out. There won't be many. The company expects to repurchase only about 205,000 shares in the process, which should cost about $7.4 million based on yesterday's closing price.

So is Pre-Paid sticking it to the little guy, or is it making a shrewd yet sound cost-cutting decision? It costs as much for a company to service small investors as it does for its larger shareholders. The printing and shipping of annual reports and other corporate communications alone finds some companies shelling out a few bucks a year on each shareowner. Shaking smaller stakeholders out may make sense in that regard, even though the Internet is providing companies with a more cost-effective digital way to reach many of its investors.

Usually, obscure penny-stock companies like Detwiler, Mitchell, Mercury Air Group (NASDAQ:MAX), Musicmaker.com, or Arlington Host are the ones trying to pull this type of maneuver. Raytheon (NYSE:RTN) effected a reverse-forward split five years ago, though it was also part of reclassifying its dual-share structure as a single class of common stock.

Larger companies have come up with other ways to shake out small-fry shareholders. A few years ago, Disney (NYSE:DIS) encouraged its odd-lot investors to take advantage of a tendering opportunity to cash in their shares. As a popular gift stock, Disney has plenty of odd-lot investors; it's the second-most-popular single-share purchase at OneShare.com. However, the Disney offer was not mandatory. As an entertainment company, Disney seems to value the opportunity to reach some of its smallest investors, who may also be some of its most ardent supporters.

Other companies have tiered perks. Amusement park operator and Motley Fool Income Investor newsletter pick Cedar Fair (NYSE:FUN) sends out some sweet half-priced admission and lodging coupons to investors who own at least 100 units.

So where does this leave Pre-Paid Legal? The move will save the company a little pocket change in the long run, but it's a lot like washing your car halfway through a drive along a muddy road. Come March 18, odd-lot investors will come trickling back.

I also don't like the message that the company is sending. If you have less than $3,592 riding on Pre-Paid, you're better off dead to the company? That's not right. Next you'll see companies doing 1-for-1,000 reverse-forward splits and 1-for-10,000 reverse-forward splits. Institutional investors matter, but smaller retailer investors do, too -- especially for consumer-based companies, where spurning Granny May and her 78 shares may drive away an infuriated customer.

There was a time when companies encouraged small investors to become larger ones, gradually, through dividend reinvestment plans. That's the way it should be. Let's hope Pre-Paid's move doesn't catch on.

Longtime Fool contributor Rick Munarriz is an odd-lot investor in a few companies, Disney included. He is also an investor in Cedar Fair.The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.