Discussion in 'Stocks' started by a529612, Nov 7, 2006.
so what will the new price be? good thing i guess, more for stocks that i can trade, cant scalp that NT as it is now. need somthing above 20$
Is reverse split usually the kiss of death for a company?
From the fellas of Motely Fool
: Is it OK that a stock I own is planning a reverse stock split?
- H.R., Beverly Hills, Calif.
A: Yikes. Generally, it's just companies in trouble that execute reverse splits. The splits are often done to avoid getting delisted from a stock exchange that has minimum stock-price requirements. They also prop up stock prices so they look less embarrassing. For example, imagine a stock trading at $1 per share. If you own 200 shares and the company announces a 1-for-10 reverse split, then you'll suddenly have one share for each 10 that you owned. You'll now hold 20 shares, priced around $10 each. Note that before and after the split, the value of your shares is the same: $200. All that really happened is the company increased its stock price by decreasing its number of shares. Be wary of companies announcing reverse splits.
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