Individual Stocks

Selecting Individual Stocks

What is a “reverse stock split”?

A reverse stock split occurs when a company decides to consolidate its outstanding shares. If a company has two million shares outstanding, it may wish to consolidate these shares down to one million by doubling the price of each share. So instead of having two million shares trading at $50, the company now has one million shares trading at $100. Companies normally decide to engage in reverse splits when they have a depressed stock price, and that decision generally is not seen by the investment community favorably.


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