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Deciphering Corporate Actions: Share Consolidations and Share Splits
By Finance Savvy  •  March 26, 2018
What is Share Consolidation? Share Consolidation is also known as "Reverse Stock Split". It is a corporate action to decrease the total number of outstanding shares and increase the nominal or par value of each share. After the corporate action, the shareholder will own fewer but theoretically higher priced shares due to the decrease in the total outstanding shares in the market. There will be no impact on the value of the shareholder's holdings relative to the total market valuation of the company. Companies undertake share consolidation for three possible reasons: Increase the company's share price to generate market interest. Attract institutions investors with a mandate of investing in shares above a specified price point. To meet the minimum trading bid size of the stock exchange to maintain its listing status. Overall, share consolidation is often taken adversely by shareholders as a mean to meet the minimum trading bid size ......
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By Finance Savvy
During the Global Financial Crisis in 2008, I discovered that many of my friends who were working as managers and directors at the peak of their careers were retrenched and left stranded with financial responsibilities ...
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