General Electric Stock Gains Ahead of 1-for-8 Reverse Split Debut

[mahatmakanejeeves]

Full disclosure: I own shares of GE.

I'm posting this because a lot of DUers own shares of GE. I hadn't heard of this until now. I wanted people to know what had happened when they saw that 87% of their shares in GE weren't there anymore.

If you don't now own a multiple-of-8 number of shares, you'll have to have a cost basis by next April for the 1, 2, 3, 4, 5, 6, or 7 shares that you sold today.

General Electric Stock Gains Ahead of 1-for-8 Reverse Split Debut

Mon, August 2, 2021, 3:27 AM

General Electric's 1-fo-8 reverse stock split will reduce the industrial group's outstanding shares from around 8.8 billion to 1.1 billion at the start of trading Monday.

{snip}

[Tomconroy]

1. I own a little. Not the best investment I ever made.

The shares date back to the time I thought I knew something about picking stocks. I was wrong.

[Crazyleftie]

2. I am confused

Wouldn't one lose a ton of money with a reverse split?

[Tomconroy]

3. No. The value of the shares will go up in proportion to

The reverse split. Same money, just fewer shares. You used to own 800 shares, now you only own 100. Fewer bragging rights, but the same money. If the shares were worth $10 a piece, they will now be worth .$80 a piece.
Not sure why companies do it. I guess the CEO likes the sound of a higher stock price.

[mahatmakanejeeves]

4. Usually a company does this only if it has to. If the stock price gets too low, the shares are in

danger of being delisted. GE wasn't anywhere near that low.

It's not a taxable event, as long as there's no sales of shares to avoid a fractional share. If that happens, you have to dig up your cost basis.

I've already made a note for next April.