What the hell is a reverse split & why does it suck so much?

One of my penny stocks (NSPR) underwent a 1 for 35 reverse split today. Didn't lose much but DAMN!

Yeah, I could google, but TexAgs is so much more entertaining.

For your efforts:

Were probably going to be delisted. Most exchanges won't keep a company on the exchange if it's stock is under $1 for a prolonged period of time. So in order to come into compliance, they do a "trade."

It's the opposite of a split.

it sucks because it means the company can't maintain a decent stock price.

There is a cinderella story or two about reverse splits that ended up doing well, but not so much.

Just went through a 15/1 reverse split on one of my pennies. Went from a lot of shares at $0.30 to a lot less at $4.50. Stock price is currently $1.45. It's a good company. Oh well. Live and learn.

If you're in a penny stock and it reverse splits you're gonna have a bad time.

This will be either really good or really bad.

Basically, your stock has turned into a "small float" stock. Which means any news could shoot it to the moon or crater it because there is such a small amount of shares on the market. For instance, check out rsls (formerly etrm) last January after it went through a major r/s (a 3-4 day run that took the stock from the 2-3$ range to around 30.)

I'm not sure what your new average is but I hope you get lucky and sell for double when some good news comes out.

Note: please sell because it's a momentary spike that won't last.

Short version (pun intended). It means the stock stinks.

Number of reasons why reverse splits occur but the primary reason is because of listing requirements. Stock price has to maintain a certain dollar value to be listed and instead of being successful as a company its easier to reverse split a $0.80 cent share by 5 to get a $4/share price.

As a historical rule 88% of reverse split stocks revisit the pre-split price. OUCH!

The only ones I would ever consider would be in growth sectors where all boats rise with the tide. Sometimes the reduced float (outstanding shares) creates some quicker price action.

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The only ones I would ever consider would be in growth sectors where all boats rise with the tide. Sometimes the reduced float (outstanding shares) creates some quicker price action.

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I don't care for this statement, but everything else said on this board is true.

We have used reverse splits to take stocks private.

I did an IPO once that used a reverse split of the private shares prior to taking the company public. It was a private REIT that we took public.