What is a reverse stock split?
We can also have a do-ka-ek. Companies sometimes declare to retire their stocks in a certain proportion of their outstanding stocks. Hence, a 1-for-2 reverse split would mean that any shareholder will now own half the number of shares with the price of each being double as before the reverse split. However, the total value of the holding will remain the same on the day of the split. Reverse splits are currently not allowed in India though companies can buy back their shares upto a certain percentage of the outstanding number of shares.
