What is a Reverse Stock Split? [ Ссылка ] PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE It is not a great thing. Let's discuss the what, why, pros and cons... Shares on an exchange have to maintain a minimum stock price; for instance on the NYSE a stock will be delisted if it trades below $1 for 30 consecutive days. That is a serious inconvenience for investors and no one really wants to have the stock delisted.
A reverse stock split is the exact opposite of a stock split. In this corporate action, the company reduces the number of shares outstanding.
- You own 1000 shares of ABC stock at $15 a share
- Times get hard and the share price falls to $0.8 a share
- Reverse split 10 for 1.
- Instead of 1000 shares you only get 100 shares worth $8 per share.
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