the reverse split with stocks
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When a stock price gets low, bad things happen… investor perception changes negatively, many mutual funds, etc. won’t buy stocks under $10/share, shares with too low a price can risk de-listing from stock exchanges. So a stock that falls to a low price might do a reverse split, reducing the number of shares outstanding and increasing the value of each one that does exist. So if you bought 100 shares of a company and the stock fell to $3, they might do a 1:10 reverse split and you’d end up with 10 shares each worth $30. Overall value of your shares, overall value of company doesn’t change, just the fractions it’s sliced into.
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