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I have the following position

ABC 500 shares @ $120.00

ABC is trading at $15.00. $60000 - $7500 = -$52500

ABC did a reverse split 1:5. An 80% decrease in shares. After the split, it is trading at $40.

How do I calculate the updated position based on my existing average price? I know it results in 100 shares but I'm not sure about the price.

  • So why did the stock price drop from $120 to $15. – Richard Eligan Dec 30 '16 at 15:51
5

You paid $60000 for your shares. You now have 100 shares, so your price per share is $600, i.e., 5 times the price you paid.

Another question here is why a 1:5 reverse split only increased the price to $40; 5 times the $15 pre-split value is $75.

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