Reverse Stock Split

A reverse stock split is a method used by a company to reduce its number of shares outstanding, while increasing proportionate per-share price. A reverse stock split, the opposite of a stock split, increases the value of each share while the total value of outstanding shares remains the same. Corporates often use a reverse stock split to amplify the price of their stock and attract investors. Many investors do not look favourably upon a reverse stock split as a corporate can use a reverse stock split to hide falling stock prices.

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