The procedure by which a company reduces the number of shares outstanding The total number of shares will have the same market value immediately after the split as before it, but each share will be worth more
Occurs when a greater number of a company's shares is exchanged for a fewer number, resulting in a higher share price
Procedure whereby a corporation reduces the number of outstanding shares The total market value of the shares remains the same after the reverse split, however, a share is worth more A company, for example, executes a 1 for 2 split An investor owning 1000 shares will deliver them to the issuer and they will receive half as many new shares--but the shares will have double the value of the original shares Thus, the investor now has 500 shares with a value of $8, instead of 1000 at $4--that is, the investor shares are worth the same amount as before the split
Procedure where a company reduces its number of shares outstanding After a reverse split, the shares' market value will remain unchanged but each share will enjoy a higher price For example, if a firm with 10 million outstanding shares selling at $1 a share executes a 1-for-10 reverse split, it will end up with 1 million shares selling for $10 each Reverse splits are seldom associated with good fortune In fact, the opposite is often true, as many companies are compelled to declare reverse stock splits to simply maintain the minimum share price requirements necessary to remain listed on a stock exchange (See "Split")
a decrease in the number of outstanding shares of a corporation without changing the shareholders' equity
Obtaining a higher share price through reducing the share position of the investor Ex 1 FOR 4, a company trading a $ 0 25, would post consolidation be trading at $1 00, consequently the shareholder would own less shares, every 4 shares owned prior to the consolidation would now be worth 1 The end result has no effect on the market cap of the company
A decrease in the number of outstanding shares of stock without any change in the shareholders equity or the market value of the stock at the time of the split The total number of shares will have the same market value but each share will have a higher price per share For example, a firm declares a reverse 1-for-10 shares split The holder of 1000 shares of the company at $1 00 per share will now have 100 shares at $10 00 per share
When a company reduces the amount of shares outstanding (so the 100 shares of IBM you own at $100 apiece becomes 50 shares at $200 apiece)
The reduction in a corporation’s outstanding common stock This is accomplished by replacing outstanding common stock by fewer shares and increasing the stated or par value per share The total number of shares will have the same market value immediately after the reverse split as before
when shares of a security are reduced For example a company might declare a 1 for 5 reverse split, meaning for every 5 shares you now own you get 1 This is usually perceived as a negative by most investors
The exchange of a greater number of a company's shares for a lesser number For example, exchanging three shares for one This results in a higher share price and less shares outstanding This is also called a consolidation or a negative split