What happens when a company does a reverse split?

Question

I have 10,000 shares of stock in this company, and I hear that a reverse split is about to happen.

What does this mean, and what will happen to my shares of stock?

Will the price of my shares change?

what is a reverse split?


THANK YOU

Answer 1

It simply means your share amount will be cut.
Example:
IF they do a 5 to 1 split your 10,000 shares will be divided by 5. You will be left with 2000 shares.

This split will raise the price of the stock dramatically but since your shares were cut in the first place you basically stay right where you are in terms of money.

I had this happen, I left everything alone and all turned out fine.

The reverse split is opposite the regular split. You probably know that the when stocks split they go way down in price... This is a huge indication to buy while that price is LOW. Yet many do not understand and they get scared of the price dropping and sell out. To which they lose almost all their money! DUMB idea but some people really shouldn't be investing if they cannot control their fear.

Thanks for asking such a good question !! I tried to put the answer in the simplest form.

Happy Black Friday !

: )

Answer 2

your number of shares will decrease.... for example... 2 shares will become one..depends on the company how it will reverse split. 3 for 1 , 4 for 1 etc etc.

Answer 3

the first guy is correct there will be less stock available for purchase. The value should increase as these stocks are now harder to come by. Also, the value should increase b/c this shows that the company is doing well enough to buy back the stocks they have currently to reduce the number (usually)

Answer 4

I went with the aid of a opposite inventory split with Palm a pair of years in the past. My proportion count quantity dropped to a 0.33 of what I had and value dropped like a rock. It labored out ok for me nonetheless, because of the fact I loaded up on greater inventory on the discounted value and held the inventory for various greater years, went with the aid of a inventory spit and cashed out at last tripling my preliminary investment. area of the story is that it particularly relies upon. If the business corporation has solid financials and a sound marketplace technique it is going to artwork out interior the tip. If the business corporation is waining and that's an attempt at propping a sagging proportion value, run for the exits. ultimate of success.

Answer 5

You will have half as many shares and they will double in price.