reverse split on stock?

A reverse split it used by companies to reduce the number of outstanding shares in the market and generally increase the price of the stock. It has no effect on the value of your position because the share price increase is offset by the reduction of shares owned.. This is typically a negative for the company. It usually means that the companies stock has fallen to a low level, so that mutual funds for example can't purchase it anymore because it is below their minimum buy price $5.00 for example. It also has an impact on dividends but, it is pretty rare for a company that is paying dividends to do a reverse split.

If you had 1000 shares worth $10 per share, a 1 for 2 reverse split would leave you with 500 shares worth $20 each. Immediately before and after the split, you have $10,000 worth of stock. It is really a PR issue. The actual value of the shares does not change.

In theory it's does not change the value of the stock, but typically it's bad for the stock holder as it usually indicates weakness in the company. It is done to increase the visible price of a stock share, and to prevent the stock from being delisted in exchanges which require shares to be above a certain price.

opposite chop up won't decrease your fairness. you in simple terms alter your sort of shares owned, yet double the fee often. opposite splits are many times accomplished to consolidate the inventory pricing and make it extra eye-catching to different traders. you need to even see a short term reducing of fee, yet a protracted term investment of the inventory is meant to yield larger features than if it have been left on the a million/2 fee, double quantity. Your preliminary investment replaced into $1800. You lost approximately $1600, or almost ninety% of the fee while it went to $a million.00 / share. it is at the instant at $4.05 variety of and that they opposite chop up the inventory, to shall we are saying a million for 7? Now your investment is well worth $810 and you have have been given a internet loss of $990. nicely, in case you surely choose the $810, and your funds out, you will ought to pay some brokerage expenses, and that would particularly selection from no longer too plenty ($40 or much less according to transaction) to practically all you have. My suggestion may well be to take a seem at their information, it particularly is attainable on yahoo finance. at the instant the fee is down, however the fifty two week intense is practically $10.00 according to share larger than the present industry and it is trending upward. for the reason which you have already taken a great hit and you have have been given no longer something to lose, i might carry directly to it and notice the place it is going contained in here few months. sturdy luck, i'm hoping it may pay off enormous for you.

Its a wash. Check the link, it can explain it better than I can. The last paragraph answers your question.

http://beginnersinvest.about.com/od/beginnerscorne...