Don asked in Business & FinanceInvesting · 2 months ago

I purchased 25000 shares of stock which split at 125:1 and now I have only 200 shares at the same price I initially paid.  Something wrong ?

6 Answers

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  • 1 month ago

    That was a REVERSE stock split.  Small 'penny stock' companies that are struggling to stay alive often do this to artificially prop up their stock price.  Some exchanges delist the stock when the price falls below a certain point. If the price after the reverse split is the same as the original price you paid, then the value of that stock has fallen to 1/125th of where it started.

    If you paid ten cents a share originally, you spent $2,500.  It's still ten cents a share but worth only $20.  That's a drop of 99% in value.

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  • Steve
    Lv 6
    1 month ago

    Welcome to the world of reverse stock splits where your investment goes up briefly only for it to crash down to what you originally bought it at. Only this time you have almost 25,000 shares less. Strange that it is already at the price you originally paid for it, but it was eventually going to get there anyway. Been there done that. Learned my lesson. Sell now while you can still get most of your money back. You can only dress up a pig for a second before people see that it is still just a pig. 

    • SumDude
      Lv 7
      1 month agoReport

      Actually, considering this is his first Q I would bet this is a homework Q.

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  • Anonymous
    2 months ago

    Yes, you don't know what kind of split happened.

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  • 2 months ago

    terminology. You had a REVERSE stock split.

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  • Petter
    Lv 7
    2 months ago

    Then it wasn't a split, now was it? It was a reverse stock split or a stock merge, but the price should be about 125 times higher...

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    • Petter
      Lv 7
      1 month agoReport

      Since he bought 25 000 of them, I presume they were quite cheap, max one dollar. So now they would have been less than one cent, makes no sense at all.

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  • Anonymous
    2 months ago

    Sounds like the stock lost 96% of its value. That’s the risk you take with stocks. 

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