Reverse Split Records

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A reverse split changes the share count; fractional-share treatment determines what remains as shares or cash.

Investor.gov explains that ten old shares become one in a one-for-ten reverse split. Some arrangements cash out fractions, and subsequent trading prices can fall.

Reconcile a fictional statement

Start with 237 shares valued at $4 each: $948. Assume a one-for-ten split and specified terms paying $40 per new-share equivalent for fractions, with no fees or taxes.

237 ÷ 10 = 23.7. The record becomes 23 whole shares plus cash for 0.7 share: 0.7 × $40 = $28.

At an illustrative $40 post-split market price, shares are worth $920; adding $28 cash reconciles to $948. Counting 23.7 shares plus the cash would double-count the fraction.

If the market price later falls to $36, the shares are worth $828. With the unchanged $28 cash, total value is $856—$92 less.

Verify the ratio, fractional treatment, actual cash pricing and payment status. The assumed cash price is not guaranteed; this is not a tax-basis calculation or investment recommendation.