Effect of a reverse stock split

[shaunna75]

Most people hear this term and I did some research and found out the effect of reverse stock split. The reverse stock split can indicate weakness in the company because they might be trying to artificially raise the price of the stock to make it look like a better investment and that is not good for the stocks.

 

[rc450]

jesus christ.... you're like a machine gun

 

[trader3cnd]

They may want to avoid delisting most of the times.

 

[sharanki]

Trader3cnd is right. The real only reason for a reverse stock split is to avoid de-listing or make the stock look better than it usually is. Most of the time there are deteriorating fundamentals and signal more losses in the stock.

 

[sharanki]

Look at C and ERICY. Great examples of a reverse split

 

[sharanki]

I can't think of one good reverse split that ended up positive. Oh yeah. I forgot AIG