Reverse stock split

In finance, a reverse stock split or reverse split is a process by which shares of corporate stock are effectively merged to form a smaller number of proportionally more valuable shares.

A reverse stock split is also called a stock merge. The "reverse stock split" appellation is a reference to the more common stock split in which shares are effectively divided to form a larger number of proportionally less valuable shares. New shares are typically issued in a simple ratio, e.g. 1 new share for 2 old shares, 3 for 4, etc. A reverse split is the opposite of a stock split.