What is a reverse stock split -i own clm hold or sell ?

%26lt;%26lt;%26lt;what is a reverse stock split%26gt;%26gt;%26gt;





A reverse stock split is usually done to raise the stock price of a company/fund. Since many organizations are not allowed to hold shares that trade for less than $5.00 per share, reverse splits often increase the number of potential buyers of the stock.





If the ratio is 1:4, as it is for CLM, four pre-split shares will be converted to 1 post-split share. So, if you owned 500 shares before the reverse split you would own 125 after the reverse split.





Since the total value of the company/fund is not changed by a reverse split the price per share normally increases by the same ratio. So if the stock was trading at $2.50 per share just before the reverse split, you would expect it to trade at $10.00 per share after the split.





%26lt;%26lt;%26lt;i own clm hold or sell ?%26gt;%26gt;%26gt;





That is a decision you will have to make for yourself. The only thing I can tell you is that if I owned the stock the reverse split would not have any impact on my decision to hold or sell.|||a stock split is where they convert 1 old share into 2 new shares (the value halves in that case) this increases tradability.





a reverse stocksplit, is the opposite, here 2 old share become 1 new share. this decreases tradability. (the new stock is worth twicethe old stock)





the ratio's ma differ in practice ofcourse.