A reverse stock split is a type of corporate action that consolidates the number of existing shares of stock into fewer (higher-priced) shares. A reverse stock split divides the existing total quantity of shares by a number such as five or 10, which would then be called a 1-for-5 or 1-for-10 reverse split, respectively.

A company might conduct a reverse stock split to avoid delisting from major exchanges like the NYSE or Nasdaq. Both exchanges require listed companies to maintain a minimum share price of $1.00.