I am quite interested in reverse stock split. Here is what I learned yesterday. Hope this would also help you guys.
A reverse stock split is also called a stock merge, where a company merges the stocks to form a smaller number of proportionally more valuable shares. Company reduces the total number of outstanding shares in the open market, a signal of a company in distress. By involving such process, the share price will increase. For example, in a one-for-three reverse split, shareholders would receive one share of new stock for every 3 shares they owned. If a shareholder owned 300 shares before the split, he/she would own 100 shares after the reverse