I noticed today, that a couple of the top gainers in the NYSE and the NASDAQ had reverse stock splits yesterday. SGY and DZSI show gains of ~300% and ~400% respectively. Each is associated with a 5 for 1 reverse split.

If I held stock in these companies yesterday, would I have profited by these gains?


If I held stock in these companies yesterday, would I have profited by these gains?

No. For DZSI, your 5 shares at $1.10 would now be 1 share at $5.50, so you would have the same total amount. For SGY, they closed at $6.95, and opened at $32.80, so your five shares at $6.95 would now be one share at $32.80, so you would have actually lost money (not purely because of the split, but because the "new" shares are trading lower then the expected 1:5 split price).

A split in general does not affect market cap (how much your total shares are worth) but there may be residual effects that cause the market value to fluctuate after a split that affect the price.

  • 1
    ... particularly if there's a reason they reverse split, for which a common reason is "because the price is too low"... – Joe Mar 1 '17 at 17:46
  • @Joe That was probably DZSI's motivation - SGY emerged from bankruptcy and replaced the old shares with new shares at a ratio of 1-for-5.674558. – D Stanley Mar 1 '17 at 17:52

These are not real gains. Wherever you're looking this up, the prices are not adjusted for corporate actions. In a reverse stock split the price of a single share multiplies by five, but as a shareholder you hold only one share after for every five that you did before.


I just had a reverse split done 1 to 35. I went from 110,000 shares and a negative 13k to 3172 shares, and I still had a negative 13k. If your company does a reverse split take the lost and get out, it's bad news all the way around.


I owned 2 shares of nspr when it split 50 to 1. I owned 2 original shares that I purchased for .145. Fourteen and a half cents per share. On Friday, 3/29 I had .29 equity value. On Monday, April 1 my equity value was $14.00. My shares value jumped over 4,000% and I sold my two shares for $14.00, that cost me less than 30 cents. Extrapolated by adding 4 zeros to my .29 investment amount and shares purchased increased by the same value, if I had invested $2,900.00 for 200000 shares, I would've sold for $1,400,000.00. How is that a bad thing?

  • This answer is about a stock split. The question was about a reverse split. They are different things. – zeta-band Apr 2 at 22:13

protected by Chris W. Rea Apr 1 at 22:50

Thank you for your interest in this question. Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count).

Would you like to answer one of these unanswered questions instead?

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