The Effect of a Reverse Stock Split A reverse stock split has no inherent effect on the company's value, so the company's total market capitalization is the same after the reverse split. The company has fewer outstanding shares, but the share price increases in direct proportion to the reverse stock split. The total value of the shares an investor holds remains the same as well. If an investor owned 1,000 shares worth $1 each prior to a one-for-10 reverse stock split, after the split the investor would own 100 shares worth $10 each. The total value of the investor's shares is still $1,000. Implications of a Reverse Split Reverse stock splits generally carry a negative connotation. A company is more likely to undergo a reverse stock split because its share price has fallen so low that it is in danger of being delisted from a major trading exchange for failure to meet the minimum required share price level. However, a reverse split can be beneficial to a company by boosting its stock price to a level that enables it to transition from being a penny stock traded over the counter to being listed on a major exchange, thereby attracting the interest of more investors.
News 
Market Data 
Discover 
