General Electric completed a 1-for-8 reverse stock split on 8/2/2021. When a reverse stock split occurs, the total number of shares held by shareholders (known as outstanding shares) decreases while the price per share typically increases. A reverse stock split proportionally affects both whole and partial shares. A reverse stock split does not by itself change the total dollar value of your position but as always, the value of a company’s stock may change due to market fluctuation.
To calculate the number of shares that you will have after the split, multiply the ratio of the stock split by the number of shares you held at the time of the split (1-for-8 ratio means 1 divided by 8 equals 0.125). To do the calculation for your own shares, use the following equation: shares previously owned x 0.125 = new amount of shares held.
Example 1-for-8 reverse stock split:
If you owned 4 shares of Example Company valued at $12.00 per share, your investment would have a total value of $48.00 (price per share x amount of shares held). At the time the company completed the 1-for-8 reverse split, you would now own 0.5 shares valued at $96.00 per share, resulting in a total value invested of $48.00. The total value invested remains the same regardless of the split.
If you have questions regarding corporate actions that affect shares you’re holding, we recommend contacting the appropriate company’s Investor Relations team or locating the Investor Relations page on their website for clarification.
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