reverse stock split

A proportionate decrease in the number of shares, but not the total value of shares of stock held by shareholders. Shareholders maintain the same percentage of equity as before the split. For example, a 1-for-3 split would result in stockholders owning one share for every three shares owned before the split. After the reverse split, the firm's stock price is, in this example, three times the pre-reverse split price. A firm generally institutes a reverse split to boost its stock's market price. Some think this supposedly attracts investors. Bloomberg Financial Dictionary

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See also change in nominal value / consolidation Euroclear Clearing and Settlement glossary

Corporate action that consists of a change in nominal value, a consolidation. With this corporate action, the number of outstanding shares of stock is decreased without any change in the shareholder's equity or the aggregate market value at the time of the reverse split. Stock price and nominal value are increased accordingly. Euroclear Clearing and Settlement glossary

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   A reduction of the number of outstanding shares in a company into a smaller number of stocks without cost to the shareholders who retain their proportionate holdings. This is not as common as a stock split and is usually only seen when the stock price is low. The move boosts the nominal price of each share, although it does not affect their value because each of the reduced number of shares now represents a larger share of ownership of the company. Also known as a negative stock split.

   ► See also Stock Split.

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reverse stock split UK US noun [C] (also reverse share split)

► STOCK MARKET, FINANCE the act of reducing the number of shares a company trades without reducing the total value of the shares. This has the effect of increasing the value of each share in order to attract new investors: »

In May, the board will ask shareholders to approve a 1-for-10 reverse stock split in order to boost its share price above a dollar.