If I short sell a stock, and the company goes through a reverse split (say 1 for 5), what happens to the share I have short? A regular split is easy, since any number of starting shares can be multiplied into the split shares. Also, a reverse split makes sense if you are long, they can give you the quotient number of shares, and give you the remainder in cash. But, for a short reverse split, where the number of shares doesn't divide evenly, what happens? If the broker called my margin, bought back the share and returned it, I would be forced out of the position, potentially having tax implications. If the broker (exchange?) forced me to own the even number of shares to go into the split, I might also be unable to get the shares in time. Lastly, some brokers allow partial shares, which would make this okay, but I don't know of any brokers that allow partial *short* shares. What really happens? (I did look around on Google before asking here first; apologies if this is covered elsewhere)
My guess they (your broker) would cover the remainder before the reverse split. And then reverse split the rest. You have 11 shares, the reverse is 10 to 1. They would cover 1. So the 10 you would have left get converted to a single share.
interactive brokers does. https://ibkr.info/article/3416#:~:text=Can I short fractional shares,)"/"Stocks".
In my portfolio, what would that look like? It sounds like it would appear as a buy to close with the broker closing on my behalf?