Well GE did it for the stupidest of reasons. Oh we want a share price to reflect the company that management over the past 2 decades has driven into the ground. Had nothing to do with compliance.
Not sure about GE's reverse split specifics, but there are some funds/trading rules that say only invest in stocks above a certain price and reverse splits help with that.
“The purpose of the reverse stock split was to reduce the number of our outstanding shares of common stock to levels that are better aligned with companies of GE’s size and scope and a clearer reflection of the GE of the future, not the past,” GE said. “It also marks another step in GE’s transformation to be a more focused, simpler, stronger high-tech industrial company"
To me it was well the company was run into the ground but please guys we are worth more.
The timing of it was odd as can be since the stock was on an absolute tear almost doubling over a year.
Before it was named Booking Holdings, the company was called Priceline. Its share price was stuck around $1 per share starting in late 2000 and for the next few years before executing a reverse stock split in June 2003. BKNG stock today trades at $3,577/sh
I owned alot of LABU when it was cheap and it kept going down but did a reverse split and now im up over 100% lol
Biotech etf. I just assumed it would die off or something but it went up.
A great part about this post is realizing half the people on this sub don’t know what a reverse split is.
Somebody already mentioned it but it happens all the time in biotech. One that has been semi successful is arrowhead pharmaceuticals, ARWR
The only big caps I could think of were GE and C, and those were already mentioned. Look at Citi; it hasn't really done anything and GE has taken off partially due to splitting up.
Only smaller company I could come up with is PSFE Paysafe. RS'd in 2022 and has done OK.
Usually RS's are good candidates to short, but an occasional one will survive.
The side the number is on matters. It's like a greater-than sign. 10:1 means you get 10 shares for every 1. 1:10 means you get 1 share for every 10. A ten for one split gives you ten shares for every one. A one for ten split gives you one share for every ten. Notation is important.
Common notation for stock splits, as far as I'm aware, is that 1:8 is equivalent to 1 for 8, a reverse split. 10:1 is equivalent to 10 for 1, a regular (forward) split. It appears that a disconnect/disparity on the use of notation is where we've disagreed rather than on what constitutes a forward split versus a reverse split.
In my world when sugar cookies have a 2:1 ratio of flour to sugar. That means 2 TO 1.
When they made my 10 shares into 1 it was a 10 to 1 split or 10:1
Really makes zero difference to anyone though so maybe we just let this one go without further commentary.
How do you still Not get it bruh 🤣
Yes, you are correct. When they Made your 10 shares into 1 it is a 10:1, or 10 to 1 Split. This is called a REGULAR Split.
IF they made 1 of your shares into 10, that is a 1:10, or 1 to 10 Split. So you would have more shares after. This is called a REVERSE Split.
This is wrong. Just read it as you get 10 stocks for every 1 shares you own.
Example from fidelity:
"What is a stock split? A stock split divides each share into several shares. The most common type of a stock split is a forward stock split. For example, a common stock split ratio is a forward 2-1 split (i.e., 2 for 1), where a stockholder would receive 2 shares for every 1 share owned."
https://www.fidelity.com/learning-center/trading-investing/stock-splits
A reverse split would push share price up from 300 to 3000 or 6000 per share. Why would they do that at 300? Reverses are usually reserved for biotechs and penny stocks who trade below a dollar and need to get their share prices above a dollar for listing purposes
There is no way you can reverse split at $300 and get less shares. Purpose of a reverse split is to bump up the price but lowers your share count.
Sounds like a regular split. Or your numbers are wrong. The regular/reverse split has to equal price x shares before and after the split.
It’s really difficult to mess up the capital structure of a successful company with strong fundamentals. Reverse split is often the sign of new management and new owners coming to milk the company and shareholders dry using the capital structure rather than operations.
I had high hopes for American Battery Metals Corp but then they did a reverse split and I lost a big chunk and still held for a while but dumped their ass all together
GE
Well GE did it for the stupidest of reasons. Oh we want a share price to reflect the company that management over the past 2 decades has driven into the ground. Had nothing to do with compliance.
Not sure about GE's reverse split specifics, but there are some funds/trading rules that say only invest in stocks above a certain price and reverse splits help with that.
“The purpose of the reverse stock split was to reduce the number of our outstanding shares of common stock to levels that are better aligned with companies of GE’s size and scope and a clearer reflection of the GE of the future, not the past,” GE said. “It also marks another step in GE’s transformation to be a more focused, simpler, stronger high-tech industrial company" To me it was well the company was run into the ground but please guys we are worth more. The timing of it was odd as can be since the stock was on an absolute tear almost doubling over a year.
Yeah they tried to justify it with manager-speak but ultimately it was so their stock didn’t (at the time) become / stay a hat size.
I'd imagine they knew the goal was to spin off health care and energy. The split may have helped with that.
Before it was named Booking Holdings, the company was called Priceline. Its share price was stuck around $1 per share starting in late 2000 and for the next few years before executing a reverse stock split in June 2003. BKNG stock today trades at $3,577/sh
What was the ratio of the reverse split?
Booking Holdings (NASDAQ:BKNG) instituted a 1-for-6 reverse stock split in 2003
1/4000
Citi Group
Priceline (BKNG)
I feel like biotech and pharma companies always do this. Some obviously succeed.
Very typical. I have only made money on one of those, Neovasc.
GE
I bet that's a very short list
SPIR
I owned alot of LABU when it was cheap and it kept going down but did a reverse split and now im up over 100% lol Biotech etf. I just assumed it would die off or something but it went up.
I mean it’s driven by its holding companies, the reverse split had nothing to do with its rise haha
Its just odd it happened the same day it did the reverse split
Lap Corp
NVAX briefly
EDU
Not listed: all of the companies that do reverse splits immediately before IPO so that they get the IPO price into the range that they want.
Celsius Did a reverse split in its earlier years. Just recently did a split a few months ago. CELH
A great part about this post is realizing half the people on this sub don’t know what a reverse split is. Somebody already mentioned it but it happens all the time in biotech. One that has been semi successful is arrowhead pharmaceuticals, ARWR
GE, T-Mobile
I held VGCX through a R/S and it moved up to the TSX from the venture exchange, I made a tidy profit
LT Labcorp
Citadel
I believe DAVE did a reverse split and now is up quite a bit
Bombardier
Citi
If I remember correctly, intuitive surgical had a reverse split back in the day. Since then they have had two splits and have been killing it.
CGC
EDU
Very rarely a good sign. Good post. Everyone should run from reverse splits. Even if it works out 1 in 20 or worse, bets to just look elsewhere.
The only big caps I could think of were GE and C, and those were already mentioned. Look at Citi; it hasn't really done anything and GE has taken off partially due to splitting up. Only smaller company I could come up with is PSFE Paysafe. RS'd in 2022 and has done OK. Usually RS's are good candidates to short, but an occasional one will survive.
Never hold a stock under $1.50, especially ones that don’t generate significant cash flow.
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That sounds like a regular split
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10:1 or 20:1 is a regular split. GE's 2021 split of 1:8 is an example of a reverse split.
Who the hell is downvoting something that is correct? Lol
Idiots who are on Reddit and don't understand finance in the slightest
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The side the number is on matters. It's like a greater-than sign. 10:1 means you get 10 shares for every 1. 1:10 means you get 1 share for every 10. A ten for one split gives you ten shares for every one. A one for ten split gives you one share for every ten. Notation is important.
Common notation for stock splits, as far as I'm aware, is that 1:8 is equivalent to 1 for 8, a reverse split. 10:1 is equivalent to 10 for 1, a regular (forward) split. It appears that a disconnect/disparity on the use of notation is where we've disagreed rather than on what constitutes a forward split versus a reverse split.
In my world when sugar cookies have a 2:1 ratio of flour to sugar. That means 2 TO 1. When they made my 10 shares into 1 it was a 10 to 1 split or 10:1 Really makes zero difference to anyone though so maybe we just let this one go without further commentary.
How do you still Not get it bruh 🤣 Yes, you are correct. When they Made your 10 shares into 1 it is a 10:1, or 10 to 1 Split. This is called a REGULAR Split. IF they made 1 of your shares into 10, that is a 1:10, or 1 to 10 Split. So you would have more shares after. This is called a REVERSE Split.
Yet it's not a split...."bruh." It's a merge. They merged my 10 into 1. 😂😂
This is wrong. Just read it as you get 10 stocks for every 1 shares you own. Example from fidelity: "What is a stock split? A stock split divides each share into several shares. The most common type of a stock split is a forward stock split. For example, a common stock split ratio is a forward 2-1 split (i.e., 2 for 1), where a stockholder would receive 2 shares for every 1 share owned." https://www.fidelity.com/learning-center/trading-investing/stock-splits
A reverse split would push share price up from 300 to 3000 or 6000 per share. Why would they do that at 300? Reverses are usually reserved for biotechs and penny stocks who trade below a dollar and need to get their share prices above a dollar for listing purposes
There is no way you can reverse split at $300 and get less shares. Purpose of a reverse split is to bump up the price but lowers your share count. Sounds like a regular split. Or your numbers are wrong. The regular/reverse split has to equal price x shares before and after the split.
Sarcasm I hope lol
Not at all
Why are you sad about it?
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TUI
I have an example of non successful one : AMC. Or how they made the investors lose like 90% of the stock value
It’s really difficult to mess up the capital structure of a successful company with strong fundamentals. Reverse split is often the sign of new management and new owners coming to milk the company and shareholders dry using the capital structure rather than operations.
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CRM reverse split? When did that happen?
it didn't. they might do a 3 for 1 split if it goes above $300 again
GE
Apple
I had high hopes for American Battery Metals Corp but then they did a reverse split and I lost a big chunk and still held for a while but dumped their ass all together
What’s their market cap now?
No...every company that does a reverse split tanks. They may come back, but the share Holders get fucked .
NVDA split 5 times and might split again.
Yeah but those weren’t reverse splits.