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The number of outstanding shares of Common Stock will be decreased as a result of a Reverse Stock Split, but the number of authorized shares of Common Stock will not be so decreased.
The 1-for-25 reverse stock split will automatically convert 25 current shares of the Company's common stock into one share of common stock.
If you own 50 shares of a company valued at $10 per share, your investment is worth $500. In a 1-for-5 reverse stock split, you would instead own 10 shares (divide the number of your shares by five) and the share price would increase to $50 per share (multiply the share price by five).
At the effective time, every 25 issued and outstanding shares of the Company's common stock will be converted automatically into one share of the Company's common stock without any change in the par value per share.
Does it matter to buy before or after a stock split? If you buy a stock before it splits, you'll pay more per share than what it'll cost after it splits. If you're looking to buy into a stock at a cheaper price, you may want to wait until after the stock split.
Reverse stock splits often are viewed negatively since it often is a means of inflating a stock's price without increasing the value of the company. Nasdaq. "5500. The Nasdaq Capital Market."