Reverse Stock Split

A corporate move aimed to reduce the number of existing shares of stock into fewer (higher-priced) shares. A reverse stock split, also referred as stock consolidation or stock merger, divides the existing total number of shares by a number. For example a 1-for-3 reverse split will give one share for every three shares that a qualifying shareholder owns, reducing the number of outstanding shares while increasing their price value by three folds. A stock split, in which a share is divided into many parts, is the opposite of a reverse stock split.