Definition Reverse stock split

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Reverse stock split

A reverse stock split is the opposite of a stock split. In the case of a reverse stock split the total number of shares decreases. In either a stock split or a reverse stock split the total value of all the shares remains the same however the value per share will change.

In a stock split there will be more shares therefore a lower value per share while in a reverse stock split the share value will increase. In either case the shareholder should retain the same cash value even though the amount (or number) of shares the investor holds changes.

Also see stock split

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