Take the 2-minute tour ×
Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. It's 100% free, no registration required.

In the picture below, Citigroup's stock split 1 to 10. My guess is this means that everyone who had 1 share now has 10 shares? This can't be right though, because the value of the stock after the split should be 1/10th of the value prior to the split. Somebody help me out here.

Google finance chart of Citigroup for January 2011 - April 2012

share|improve this question

1 Answer 1

up vote 13 down vote accepted

It was actually a reverse split meaning that every 10 shares you had became 1 share and the price should be 10x higher. - Citigroup in reverse split

The chart just accounts for the split. The big dip is Googles way of showing from what price it split from. If you remember before the split the stock was trading around $4-$5 after the reverse split the stock became 10x higher.

Just to clear it up a 1:2(1 for 2) split would mean you get 1 share for every 2 shares you have. This is known as a reverse split.

A 2:1(2 for 1) split means you get 2 shares for every 1 share you have.

The first number represents the amount of shares you will receive and the second number represents how many shares you will be giving up.

share|improve this answer
3  
just a note...I don't think google shows that drop intentionally, I think there is just some problem with there stock price aggregator. The flag is on there to represent the split. –  Pablitorun Jul 11 '12 at 16:44
    
@Pablitorun that's a possibility that could just be an error. On my chart from ameritrade it does not show the dip. –  Kirill Fuchs Jul 11 '12 at 17:05

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.