I bought 24242 shares for $0.16 each in Dec 2015. Today I logged into my brokerage account and saw that the share price has gone down to $.055 and I now only own 1358 shares.

To my understanding, even though the stock price went down I should still own my 24242 shares, right? Or is it the case that if a company's stock price goes down stockholders lose shares in the company?

  • 1
    What company? There was probably a big reverse split. – quid Jul 8 '16 at 21:45
  • Its ASTI. They did have a reverse split but i wasn't exactly sure what that was or how it affected my shares. So does that mean my shares are gone? – Manny Jul 8 '16 at 21:54
  • streetinsider.com/Corporate+News/… is a link to the story of the reverse split. – JB King Jul 8 '16 at 23:09
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    @Manny: In essence what it means is that they swapped your shares for a smaller number of more valuable shares (but those "more valuable" shares may have decreased in value afterwards). – BrenBarn Jul 9 '16 at 6:46

During a stock split the only thing that changes is the number of shares outstanding. Typically a stock splits to lower its price per share. Sometimes if a company's value is falling it will do a reverse split where X shares will be exchanged for Y shares. This is typically done to avoid being de-listed from an exchange if the price per share falls below a certain threshold, usually $1. Again the only thing changing is the number of shares outstanding. A 20 for 1 reverse split means for every 20 shares outstanding the shareholder will be granted one new share.

Example X Co. has 1,000,000 shares outstanding for a price of $100 per share. It does a 1 for 10 split. Now there are 10,000,000 shares outstanding for a price of $10 per share.

Example Y Co has 1,000,000 shares outstanding for a price of $1 per share. It does a 10 for 1 reverse split. Now there are 100,000 shares outstanding for a price of $10.

Quickly looking at the news for ASTI it looks like it underwent a 20 for 1 reverse split. You should probably look at your statements and ask your broker how the arithmetic worked in your case.

Investopedia links for Reverse Stock Split and Stock Split

  • Thank you very much for the information, it helps explain a lot. Unfortunately i dont have a broker so i'm going to have to do some more research to fully understand exactly how everything went down. Appreciate the help.. – Manny Jul 8 '16 at 22:12
  • 4
    How did you buy the stock? – quid Jul 8 '16 at 22:14
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    Where do you have your brokerage account if not with a broker? Broker can be a company and not necessarily an individual. – JB King Jul 9 '16 at 0:48
  • I bought it thru an app called Robinhood – Manny Jul 9 '16 at 15:09
  • 1
    @Manny then your broker is Robinhood. – quid Jul 10 '16 at 17:28

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