Wellstar International (WLSI)

[stupiderthaniwanabe]

A reverse stock split is when a company reduces the number of their outstanding shares. The value of the shares will rise proportionally after the split.

For instance: you own 1,000,000 shares of WLSI, and we'll pretend the market value of each share is .0001 so the total dollar value equals $100.

The company announces that it will be executing a 1:100 reverse share split. The word "split" confuses the first time participant. It is more easily understood if you view it as condensing shares. Divide 1,000,000 shares by 100.

This means that instead of 1,000,000 shares, you will now own 10,000 shares. However, instead of the market value of each share being .0001, each share is now worth .01 - you simply own less shares that are now worth more money PER EACH INDIVIDUAL SHARE but the value of your stake is the same, $100.