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So, what exactly *is* a **reverse stock split**? Imagine you have a pizza cut into eight slices. Now, imagine someone cuts that same pizza into just four slices, but each slice is now twice as big. That's essentially what a reverse stock split does to a company's shares. In a reverse stock split, a company reduces the total number of its outstanding shares while proportionally increasing the price of each individual share. It's like consolidating your shares. For example, if a company executes a 1-for-10 reverse stock split, every ten shares an investor owns will be combined into one share. However, the price of that single share will be approximately ten times higher than the original price. For instance, if you own 100 shares at $1 each, after a 1-for-10 reverse split, you'd own 10 shares, but each share would be worth around $10. It is a bit like a financial makeover. While the total value of your investment stays roughly the same (before and after), the number of shares you own changes. It is purely a cosmetic change, aiming to make the stock more attractive to certain investors and meet exchange listing requirements. The core of the company doesn't change, but how it appears in the market does.
