{"id":4003,"date":"2023-03-16T18:53:16","date_gmt":"2023-03-16T18:53:16","guid":{"rendered":"https:\/\/fisdomdevel.wpengine.com\/glossary\/reverse-stock-split\/"},"modified":"2023-03-16T18:53:16","modified_gmt":"2023-03-16T18:53:16","slug":"reverse-stock-split","status":"publish","type":"post","link":"https:\/\/www.fisdom.com\/glossary\/reverse-stock-split\/","title":{"rendered":"Reverse Stock Split"},"content":{"rendered":"

\nReverse stock split refers to a process where a company reduces the number of shares outstanding by a certain multiple. The share price thus increases in proportion to the said multiple. Reverse Stock split, as the name suggests, is the opposite of stock split. In a reverse stock split, the number of shares for the investor decreases, but the value remains the same. <\/p>\n

For example, a reverse stock split of 2:1 would mean 1 share issuance for every 2 shares held by the investor.<\/p>\n

The stock price will reflect this change while the market capitalization of the company will remain the same. Thus, a reverse stock split will have no impact on shareholder value.<\/p>\n

Why is a Reverse Stock Split important?<\/h2>\n

Reverse stock splits are not very common, but can be carried for various purposes, like:
\na. It can help in attracting big, institutional investors who otherwise avoid such stocks
\nb. It helps in avoiding delisting as a share price going down dangerously can trigger delisting process by either the Stock Exchange or investors<\/p>\n

How does a Reverse Stock Split impact prices?<\/h2>\n

There is not much impact of a reverse stock split on the price of a stock other than the change in the number of shares. However, investors can monitor the performance of a stock closely after a reverse stock split is announced and then take a decision.<\/p>\n

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Reverse stock split refers to a process where a company reduces the number of shares outstanding by a certain multiple. The share price thus increases in proportion to the said multiple. Reverse Stock split, as the name suggests, is the opposite of stock split. In a reverse stock split, the number of shares for the […]<\/p>\n","protected":false},"author":67,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[11],"tags":[],"class_list":["post-4003","post","type-post","status-publish","format-standard","hentry","category-stocks"],"_links":{"self":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/4003","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/users\/67"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/comments?post=4003"}],"version-history":[{"count":0,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/4003\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/media?parent=4003"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/categories?post=4003"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/tags?post=4003"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}