reverse stock split

reverse stock split
reverse stock split n: a method of increasing the value of shares of corporate stock by calling in all outstanding shares and reissuing fewer shares having greater value compare stock split

Merriam-Webster’s Dictionary of Law. . 1996.

reverse stock split
USA
A reduction in the number of issued and outstanding shares of stock which increases the share price proportionately. Reverse stock splits are most commonly used by public companies, particularly when their stock price has fallen and they want to attract more investors (under the theory that increasing the per share price is attractive to investors) or prevent delisting under stock exchange minimum share price requirements.
After a reverse stock split, a current stockholder holds fewer shares, but each share is proportionately worth more. As a result, reverse stock splits do not change the aggregate value of what stockholders own or the overall market capitalization of the company. For example, if a company's stock is trading at $1 a share and the company declares a one-for-ten stock split, every ten outstanding shares held by a stockholder becomes one share with a value of $10.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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  • Reverse stock split — Reverse stock splitA reverse stock split or reverse split is the opposite of a stock split, i.e. a stock merge: a reduction in the number of shares and an accompanying increase in the share price. [ [http://www.sec.gov/answers/reversesplit.htm… …   Wikipedia

  • reverse stock split — A proportionate decrease in the number of shares, but not the total value of shares of stock held by shareholders. Shareholders maintain the same percentage of equity as before the split. For example, a 1 for 3 split would result in stockholders… …   Financial and business terms

  • Reverse stock split — A proportionate decrease in the number of shares, but not the value of shares of stock held by shareholders. Shareholders maintain the same percentage of equity as before the split. For example, a 1 for 3 split would result in stockholders owning …   Financial and business terms

  • reverse stock split — The reduction in the number of corporate shares outstanding by calling in all shares and issuing a smaller number, though the capital of the corporation remains the same. It is the opposite of a stock split. Its effect is to increase the value of …   Black's law dictionary

  • Reverse Stock Split — A reduction in the number of a corporation s shares outstanding that increases the par value of its stock or its earnings per share. The market value of the total number of shares (market capitalization) remains the same. For example, a 1 for 2… …   Investment dictionary

  • reverse stock split — See also change in nominal value / consolidation Corporate action that consists of a change in nominal value, a consolidation. With this corporate action, the number of outstanding shares of stock is decreased without any change in the… …   Euroclear glossary

  • reverse stock split — noun a decrease in the number of outstanding shares of a corporation without changing the shareholders equity • Syn: ↑reverse split, ↑split down • Hypernyms: ↑decrease, ↑diminution, ↑reduction, ↑step down …   Useful english dictionary

  • stock split — n: the division of the outstanding shares of a corporation into a larger number of shares thereby reducing the value of each share but not the total value of each holding compare reverse stock split ◇ The purpose of a stock split is to make the… …   Law dictionary

  • Stock split — Occurs when a firm issues new shares of stock but in turn lowers the current market price of its stock to a level that is proportionate to pre split prices. For example, if IBM trades at $100 before a 2 for 1 split, after the split it will trade… …   Financial and business terms

  • stock split — Occurs when a firm issues new shares of stock and in turn lowers the current market price of its stock to a level that is proportionate to pre split prices. For example, if IBM trades at $100 before a two for one split, after the split it will… …   Financial and business terms

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