Reverse stock split Definition
A decrease in the number of a company’s shares outstanding. A 1-for-3 reverse stock split would reduce the amount of shares owned by a shareholder to one, for every three shares owned before the split. A company will generally use a reverse split to boost its stock price, which is sometimes instituted by companies to avoid being delisted from an exchange. Reverse splits are usually not looked at positively by investors. See also Stock split.