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    Q. What does reverse stock split means?

    Companies can take a variety of actions that may impact their capital structure depending on market developments and situations. A reverse stock split is a corporate action that reduces the number of outstanding stocks of a company. It is also known as a stock consolidation, stock merge, or share rollback. If an investor owns 100 shares of a company and the board of directors announced a 2-for-1 reverse stock split, the investor will end up with 50 stocks. The total share value would remain constant. If the 100 shares were worth INR 500 each before the reverse split, the fifty shares would be worth INR 1000 each after the split. In either case, total investment remains INR 50,000. On the other hand, It is frequently used to assist a company in meeting the minimum requirements to remain listed on an exchange.