reverse split


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.

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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.

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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.

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reverse stock split reverse/forward stock split