Reverse Stock Split

A reverse stock split is when a company reduces the number of its outstanding shares, effectively increasing the price per share. This is often done to meet exchange listing requirements or to make the stock appear more valuable. Shareholders end up with fewer shares, but each share they own is worth proportionally more, keeping their total investment value theoretically unchanged. However, reverse splits are typically viewed with skepticism by investors as they can signal a company's financial distress.
NASDAQ requires that companies maintain a minimum bid price of $1 per share. If a stock closes below $1 for 30 consecutive business days, NASDAQ will send a deficiency notice. The company then has 180 calendar days to regain compliance, which requires the stock to close at or above $1 for at least 10 consecutive business days. However, this period can sometimes be extended, as seen in various extensions granted to companies.
NYSE also has a minimum requirement, if a company's average closing price over a 30-day trading period falls below $1, it could face delisting procedures.