Stocks

Reverse split

A reduction in shares outstanding that proportionally increases price per share without itself changing total equity value.

Plain-English context

Why it matters

This term is part of the language used to describe ownership, pricing, transactions and investment outcomes.

EXAMPLE

If reverse split appears in a quote, filing or account screen, read it together with the instrument, timeframe and calculation method.

COMMON MISTAKE

Assuming Reverse split has one universal interpretation without checking the source, rules, timeframe or methodology.

Use current definitions. Product terms, tax treatment and market rules can change. Confirm important details with official disclosures, regulators and regulated providers.