Stock market basics
Reverse split
Definition
A split that merges shares, reducing their number and raising the price per share, such as 1-for-10.
Example
Say you hold 1,250 shares of a $0.60 stock, worth $750, and the company does a 1-for-10 reverse split. You now own 125 shares and the price adjusts to $6.00, so the position is still worth $750. Had you held 1,255 shares, the extra 5 would have become half a share, which companies usually pay out in cash.
Hypothetical numbers, for illustration only.
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