Reverse splits -- Anonymous

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Subject: Reverse splits

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Consolidation explained.

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Date Posted: Saturday, January 25, 12:15:55am

Reverse splits are possible as well though not as common as regular splits. In a reverse split, the number of outstanding shares decreases but the value still remains the same. So if there were a 2-1 reverse split for a company that had two million shares at 10 dollars a share, afterwards there would be a total of one million shares at 20 dollars for each share. A company would authorize a reverse split if they wanted to increase the price of their stock to attract more investors.

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