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2016-12-14
2016-12-16

In Stock Investing What is a Reverse Split?

By w̶i̶e̶l̶d̶l̶i̶n̶u̶x̶.̶c̶o̶m̶ author Morgan Jassen

No, really. What is it? What does Reverse Split mean in the context of stock investing? (This blog post asks the question and speculates the answer, but doesn't answer it...)

On the Computershare list of all companies ( https://www-us.computershare.com/investor/3x/plans/planslist.asp?stype=all ) I see what seems like a Bank from Greece on the list of companies -- and I remember hearing in the news about the Greek banking/economy crash last year in 2015.

I looked further and saw that this particular company went through multiple "reverse splits" around that time. This is the first time I've heard that term.

However I have heard of a "split" whereby, because the price of the stock has gone up over time, each share of the stock becomes two shares, retained by the same owner, and the price per share is halved. (the purpose being to keep the price per share in a manageable range, yet retain the same total value)

So if a reverse split is the opposite, then does that mean that for every two shares, it becomes one share and the price doubles, and that the reason for the reverse split is because the stock price went down?

Maybe I should look it up in an investing dictionary...

I have a lot to learn about stock investing.

In conclusion, I don't know what a reverse split is, and I have a lot to learn about financial investing and stock investing.


Disclaimer: I may be investing in any company mentioned above. The reader of this blog post should, before investing, perform their own independent research as appropriate. The contents of this blog post are general information from one individual's perspective; I'm not recommending how anyone else should invest.

Tags: #investing



[2019 edit: Moved to: https://i̶n̶v̶e̶s̶t̶o̶r̶w̶o̶r̶k̶e̶r̶.̶c̶o̶m̶/2016/... .html.]