KEY TAKEAWAYS
- A reverse stock split consolidates the number of existing shares of stock held by shareholders into fewer shares.
- A reverse stock split does not directly impact a company's value (only its stock price).
- It can signal a company in distress since it raises the value of otherwise low-priced shares.
- Remaining relevant and avoiding being delisted are the most common reasons for corporations to pursue this strategy.
- Bottom line is a reverse stock split basically accomplishes absolutely nothing aside from meeting delisting requirements which even that is irrelevant to the business itself.
So...if RVX does a reverse stock "consolidation" my opinion is that it would only do so to meet regulating minimum stock exchange share prices which I recall was $1 per share?
Does anyone else recall back in the day that there was discussion about maintaining a $1 per share stock price? Or maybe I'm wrong. And if I'm right why has this low stock price persisted for as long as it has? Did the regulators change the requirements. Idk.
10BagR