reverse split

Definition

A stock split which reduces the number of outstanding shares and increases the per-share price proportionately. This is usually an attempt by a company to disguise a falling stock price, since the actual market capitalization of the stock does not change at all. For example, if a company declares a one-for-ten reverese split, then a person who previously held 20 shares valued by the market at $1 each will then have 2 shares worth $10 each. Many stock exchanges in the U.S. do not allow companies with a stock price of less than $1 to remain listed, and many such companies then have to undertake reverse splits if they want to remain listed.

Use reverse split in a sentence

My friends and I are talking to people in our class about how to reverse split stocks to make a profit.

​ Was this Helpful? YES  NO 6 people found this helpful.

It was a reverse split and my friend did not know what that meant, so I explained it to him as best as I could.

​ Was this Helpful? YES  NO 11 people found this helpful.

The board felt there were too many shares on the market and therefore the price was hurting. They decided to act on a reverse split to cut the shares in half and increase share price.

​ Was this Helpful? YES  NO 4 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
reverse stock split reverse/forward stock split