100 Replies to “Stock Market Training: What is a Reverse Split?

  1. So lets say I have 18 shares of a company and the reverse split is 20:1 what happens to my shares? Would I essentially lose the money? Or will they round up my shares to just 1 share after the split?

  2. I know the definition, but I wonder how the reverse split (R/S) effects the historical CHART. So, if previous to a 1:5 R/S the chart shows a high of, say, $20. So now, after the R/S does that historical $20 now show on the chart as $100 ??? That is what I would like to know.

  3. Thanks for the lesson bro. I got too happy when XGTI did a reverse split today and almost crap my pants thinking I was profitting.

  4. how about when your shares don't get even out properly.. do you just lose that money? Ex:i had 601 shares of BAS that was worth $240. but then reverse split happen so now i have 1 share BAS that is worth $35..so did i just lose $210????

  5. So your saying if the company stock does not go up and continues to drop I'm eventually screwed?
    Has there been any time where the investor benefited from a reverse split? – Thank you for the video.

  6. So you think the main purpose of it is to give the impression that a company is doing better than it is? Possibly hoping for new buyers to not do their own due diligence? I know one advantage of a R/S is that fund managers with low limits on what they can buy, would be able to purchase them as well once the price goes up…your thoughts? What are other reasons a company would want a R/S? Based on your experience, are the usually not a good thing?

  7. cant you sell after the reverse split and then make the profit, lets say i have 1000 shares that cost me 1000 buks and the company did a 1/10/ the price would then be worth 10 dollars and i would have 100 shares. Wouldnt this mean a profit of 10x?

  8. Very good video and explanation. However, this morning I discovered there is nothing wrong with trading reverse splits for (maybe) the first 20-30 minutes. Yesterday I read Strata Skin Biotech SSKN was doing a 1:5 reverse split. This morning… I saw the stock gap up. On a whim bought 500 shares @ $3.79 and sold 15 minutes later for $5.22 for a nice little $700 profit and regretted that I didnt have the guts to buy 5000 shares.

  9. Thanks Clay, I have a Penny Stock that went from 12,500 Shares down to 12 Shares, after Splitting Twice, Guess I'll just hold on to it. Thanks for the explanation.

  10. I bought 200 shares of Dryship stock at $1.74
    That is roughly $350 of value.
    They do a reverse split of 4:1 a couple of weeks later because the stock dips to like .60 cents or something
    My shares went down to to 50 and my value was $88.

    How did this happen? I thought the value was supposed to maintain its self. Even though I have 50 shares, it should still be worth $350, right?
    In order for me to break even the share price will have to be nearly $7.00 a share.

  11. If you were holding at a loss leading into a r/s, would you sell prior or hold and hope with solid news due in the year to come. Obviously with a huge loss of profit potential due to less shares. simple arithmetic

  12. Hi,

    Wanted to find out, just in case if some one does not have 5 shares which can be converted to 1, then what shall happen? like in your example someone had 100 shares which are converted to 20 (5:1 ratio), however if someone has lets say odd # of shares like 72, what shall happen in that case? how will it affect the portfolio of that person, what are the options available to him/her?

  13. i lost money from reverse stock i brought 300 shares at. 0.28 went up 3.28 in i only had 20 shares 3.28×20=65

  14. In a short position this is a good strategy, but in the case of ANY the situation it was different, because the two next days was an oportunity to get long and take good profits.

  15. What are the rules for voting on a RS? I know each share owned equals 1 vote. But my question is does a RS require a simple majority to pass it? Meaning 50% plus 1?

  16. Thank you clay for explaining that. It happened to me twice with two separate penny stocks and every time I lost shares and they increase the value of the shares that was left however not long after that happened they diluted the market again with massive amounts of shares and the value of the stock Drop Like a Rock and you're stuck. Needless to say I've learned a hard lesson

  17. Great video thank you for helping me better understand what an R/S is. I'm a little worried now however because I just got in on RNVA and they're voting on potentially doing in RS this week they are currently at .023 a share. I got in at .01138 a share.

  18. This just happened to me with stock symbol (CYTX) Cytori Therapeutic’s I had 10,000 shares and they reverse split the stock at a ratio of one for ten on May 23rd 2018! I’m selling this shit!

  19. What if the nuumber of shares that you have doesnt divide by reverse split ratio? Do they round up? I.e. 99 with 5:1 = 20 ? Or would you gain 4 old shares/ 0.8 new shares price compensation?

  20. I was holding a stock before the reverse split they kicked me out the stock. Can they do that?

  21. Hi Clay, your 101 videos are really insightful, thank you!

    My question is this: Why would a company do a reverse split? How do they benefit from having less shares? Why is this an indication that the company isn't doing so well?

  22. Good Video. Went thru 5 videos and I only understood yours. You made it simple and clear. Thanks. Moviepass stock lol doing a reverse split tomorow.

  23. HMNY just did one. I freaked out. I watched this video. I'm okay now but still at a loss. Thanks man.

  24. I had a limit order of 2176 shares, and all of them were canceled by the HMNY. My question is, will they refund me these shares?

    Thank you in advance, cause I am so lost!

  25. If the proportions remain same, WHAT IS THE USE OF THE REVERSE SPLIT? IT JUST REDUCES THE AMOUNT OF SHARES I HOLD? WHY WILL A COMPANY DO A REVERSE SPLIT THEN?

  26. I am A new Trader I have been watching videos for about 3 and I understand the way you explain it better than the other guys

  27. Reverse splits messed me up pretty bad when I was first trading. I was trading with AYTU and they did a 1:20 ratio split.

  28. RS split are typically negative catalyst. If a company's strategy is contemplating on doing this get out and reposition later more likely as a short trade.

  29. INPX just did a reverse split. 40:1. My shares have disappeared from my list of stocks. Can a company pay you the remainder of your shares ?

  30. DGAZ is doing a reverse stock split of 1 to 20 on November 28th. I have 6 shares. What’s going to happen to my 6 shares? Will they just disappear?

  31. Why doesn't Amazon do a forward split now since their shares are going for ~$1k? Also what are the advantages of doing a forward split?

  32. Nice video. I'm a low level employee of a major company; they may have to consider a reverse stock split. I didn't know what that was. I was just curious; thanks for helping me understand the basics.

  33. So one of my investments AMMA did a reverse split for a ratio of 19:1. I had less than 19 shares. What does that mean for me?

  34. I am holding VTL. They are doing a 4:1 RS before a reverse merger with IMUX. This might be different circumstances.

  35. Hey. I’m kind of panicking because the message boards are talking about a possible R/S on my single biggest held stock. I bought it and sold it many times to make good money from it over time. But now, the share price is only 50 cents compared to the price I bought it for, 92 cents. It’s a great company just upgraded by lots of important rating agencies to a “buy”. Symbol is $LIFE.

  36. Jagx 70-1reverse spilt .i now own a fraction of a share on robbin hood that i can use at all

  37. what if you got 54 shares and the company do a 1:5 reverse split, you will get 10,8 (exact division) shares or 10 shares(truncate) or 11 shares(round)? thank you for the video

  38. Great video. I just had CEI do a Reverse-Split at 25-1 and I’m new to all of this so I was searching for answers after seeing my shares drop dramatically. Thanks for the info.

  39. Thanks Clay, Im diving into the world of stocks, and I value these types of videos. New Subscriber alert !

  40. Is the company's bod supposed to inform you about a possible r/s? Or do they do this things without any sort of heads up?
    GREAT VID BTW!

  41. But but but .
    What happened with me just recently.
    I bought stock . Penny stock.
    They had shares out standing 1.5b
    After they decided to do (1-201)
    Price now 10$.and prices goin down in two days already 6 $ .
    I lost 20.000. How ?
    I bought stock 100.000 I paid 25.000$ price was 0.25 ok good but know is not good because i had that stock one year and price was slowly going down and stopped at 0.050 cent. And they do fucking split. Now I have 497 stocks. Because 100.000:201 =497 . And market value is 497 × 6= 2982$ and Where is my 22.000
    So know I have to wait until stock rich 50 $ so I can get money back but that my not happened. So reverse stock splits scam 100% . Tell true to people.

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