1

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
  • 1
    @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
5

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
  • 1
    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

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

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