What Is a Reverse Stock Split on US Stocks in Pluang?

A reverse stock split is the opposite of a normal split: instead of dividing shares, the company combines several existing shares into one, so your share count falls while the price per share rises in proportion. The total value of your holding stays the same. In a 1:10 reverse split, one hundred shares priced at $2,000 each become ten shares priced at $20,000 each. It is also called a stock consolidation, a stock merger, or a stock rollback. Pluang processes it automatically on the effective date and recalculates your average purchase price to match. If the ratio leaves you with a fractional share — because your holding does not divide evenly — that fraction is typically paid out to you as cash, valued at the pre-split price, rather than left as a partial share. You can review the event in the Corporate Actions section on the stock's asset page.

• What it does: Combines several existing shares into one, the reverse of a normal stock split.
• Share count: Decreases in proportion to the ratio.
• Price per share: Increases proportionally, so total holding value is unchanged.
• Example: In a 1:10 reverse split, 100 shares at $2,000 each become 10 shares at $20,000 each.
• Also called: Stock consolidation, stock merger, or stock rollback.
• Fractional shares: Typically paid out as cash at the pre-split price when your holding does not divide evenly.
• Processing: Automatic on the effective date; average purchase price recalculated by Pluang.

Related questions:

Q: Does a reverse stock split reduce the value of my holding?
No. Your share count goes down and the price per share goes up by the same proportion, so the total value of the position is unchanged by the event itself. Seeing far fewer shares in your portfolio afterwards can be startling, but each remaining share is worth proportionally more. Any change in value you notice after the effective date comes from ordinary market movement in the stock, not from the reverse split.

Q: What happens if the ratio leaves me with a fractional share?
That fraction is typically paid out to you as cash rather than left sitting as a partial share. The cash value is calculated using the pre-split share price, so you receive fair value for the portion that could not be converted into a whole share under the new ratio. The payout is handled as part of processing the reverse split, arriving alongside the adjustment with no action required from you.

Q: How is a reverse split different from a normal stock split?
They move in opposite directions. A normal split divides each share into several, raising your share count and lowering the price per share. A reverse split combines several shares into one, lowering your share count and raising the price per share. Both leave the total value of your position untouched and both are processed automatically by Pluang. The fractional-share cash payout is specific to reverse splits.

Q: Do I need to do anything when a reverse split happens?
No. Pluang applies the reverse split automatically on the company's effective date, adjusting your share count, recalculating your average purchase price, and paying out any fractional share as cash. There is nothing to submit or confirm and no deadline to watch. Afterwards you can review the event in the Corporate Actions section of the stock's asset page, where past and scheduled corporate actions are listed together.