Reverse stock split

When a company combines several existing shares into one, raising the price per share without changing the company's total value. In a 1-for-10 reverse split, 10 old shares become 1 new share.

Companies often do it to keep the share price above an exchange’s minimum. Long-term price charts are adjusted, so old prices look higher than they traded at the time.

Also called: reverse split, reverse splits, reverse stock splits.

Related terms

  • Dilution: When a company creates and sells new shares, each existing share owns a smaller slice of the company. That shrinking of everyone's slice is called dilution.
  • Market cap: What the stock market says a whole company is worth: the share price times the number of shares. If the price falls 10%, the market cap falls 10% too.

← All terms A to Z