Reverse stock split what does it mean

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Your Money. Personal Finance. Your Practice. Popular Courses. What Is a Reverse Stock Split? Key Takeaways A reverse stock split consolidates the number of existing shares of stock held by shareholders into fewer shares.

A reverse stock split does not directly impact a company's value only its stock price. It can signal a company in distress since it raises the value of otherwise low-priced shares. Remaining relevant and avoiding being delisted are the most common reasons for corporations to pursue this strategy.

Why would a company undergo a reverse stock split? What happens if I own shares that undergo a reverse stock split? Are reverse splits good or bad? Why does the ETN I own have so many reverse splits? Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

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Rather, the stock price rises because of basic math. What does change is the number of shares you own and how much each share is worth. This is the opposite of a stock split. How does this change immediately affect your investment? Are you prepared for your financial future? Use this checklist to get started. Please enter some keywords to search. Breadcrumb Home Introduction to Investing Glossary. Your Money.

Personal Finance. Your Practice. Popular Courses. What Is a Reverse Stock Split? Key Takeaways A company performs a reverse stock split to boost its stock price by decreasing the number of shares outstanding. This path is usually pursued to prevent a stock from being delisted or to improve a company's image and visibility. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

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