Reverse Stock Split is a corporate action in which a company reduces the total number of the outstanding shares. A reverse share split involves the business dividing its current shares with a number such since 5 or 10, which will be called any 1-for-5 or 1-for-10 separated, respectively. A reverse stock split is the opposite of a normal stock split, which increases the number of shares outstanding. Comparable to a forward share split, the reverse split won’t add any real value to the company.
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