What is a stock split (reverse split)?
In the picture below, Citigroup's stock split 1 to 10. My guess is this means that everyone who had 1 share now has 10 shares? This can't be right though, because the value of the stock after the split should be 1/10th of the value prior to the split. Somebody help me out here.
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It was actually a reverse split meaning that every 10 shares you had became 1 share and the price should be 10x higher. - Citigroup in reverse split
The chart just accounts for the split. The big dip is Googles way of showing from what price it split from. If you remember before the split the stock was trading around - after the reverse split the stock became 10x higher.
Just to clear it up a 1:2(1 for 2) split would mean you get 1 share for every 2 shares you have. This is known as a reverse split.
A 2:1(2 for 1) split means you get 2 shares for every 1 share you have.
The first number represents the amount of shares you will receive and the second number represents how many shares you will be giving up.
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