I bought stock in PNN.L through my broker. According to them I bought the $500 dollars worth at 34.3120172899627 units at 1031GBX each on the 11/05/2021. This stock increased in value and on 02/07/2021 it was worth 1134.5GBX. An increase of roughly 10%. Then on the Monday 05/07 the stock went through a reverse 3:2 split. So according to my broker my holding went down from 34.31 units to 22.88 units. My opening rate was adjusted 1031 to 1546. So my holding is now 19% down on where it currently is - despite the normalised LSE graph continuously rising since March.

According to my calculations, I bought at 1546, the price rose until it hit 1700, it went through the 3:2 split. The stock price reduced to 1133, my purchase rate should be normalized to 1031 and then the stock value rose until it is at the point it is currently of 1239, meaning I should have a potential profit of 20.2%.

Which of us is correct?


1 Answer 1


In a reverse split, share price is increased by the split ratio and the number of shares is decreased by the split ratio. So for determining cost basis:

A) 34.31 units times 2/3 equals 22.88

34.412 x 1031 = 35,376 (pre split)

B) 1031 GBX times 3/2 equals 1546GBX

22.875 x 1546 = 35,364 (post split)

The numbers aren't exact because of decimal rounding but other than that, I don't see the problem.

What has happened to unit price since your purchase is another story.

  • So it is correct that my holding on the friday was worth $550 and then after the split on the monday was worth just ~$320? Commented Jul 22, 2021 at 17:00
  • If you look at the normalized price data from the LSE the price has risen steadily since March. Commented Jul 22, 2021 at 17:06
  • 1
    Your broker's account statement should tell you exactly what your position is worth as well as your P&L. Commented Jul 22, 2021 at 17:26
  • This is why I am disputing it. The value of a holding should be the same before and after a split. For some reason I lost out. Have you looked at the graphs I linked? Commented Jul 22, 2021 at 17:30
  • Isn't 1031 already the split-adjusted purchase price? I think you actually purchased at a higher price.
    – chepner
    Commented Jul 22, 2021 at 17:38

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