|
Definition: A reverse stock split is a reduction in the corporation's total number of shares available and an increase in the stock price.
TeenAnalyst Advice: A reverse split usually occurs for one of two reasons?
1.) Most mutual funds won't invest in a stock below $5/share. Some companies will reverse split their stock to try to get it above that level so mutual funds will invest in it.
2.) Stocks must remain above certain price levels to stay listed on a stock exchange. Companies might do this to stay listed.
A 1:2 reverse split means "1 new share for every 2 current shares." So if you owned 2 shares of a $3/share stock, you would then have 1 share of a $6/share stock after the split.
|
Spend Less Than You Earn
E-Commerce