Cernarus

Reverse Stock Split Calculator

This simulator demonstrates how a reverse stock split changes the number of outstanding shares and the theoretical share price while keeping market capitalization approximately invariant. Use it to estimate how your holdings, fractional shares and cost basis are affected by a specified split ratio.

The tool offers a standard model and a cash‑out model for fractional shares. Inputs include current shares, current price, the split ratio (old shares per new share) and an optional cash‑out price for fractional shares.

Updated Nov 8, 2025

Models broker behaviour that cashes out fractional new shares. Requires a cash‑out price (often the post‑split market price); shows cash‑out value and rounded issued shares.

Inputs

Results

Updates as you type

Issued whole new shares (rounded down)

—

Fractional new shares

—

Cash‑out for fractional shares

—

Post‑split theoretical price

$25.00

Post‑split market capitalization (theoretical)

$2,500.00

Approximate cost basis per new share

$10.00

OutputValueUnit
Issued whole new shares (rounded down)—shares
Fractional new shares—shares
Cash‑out for fractional shares—USD
Post‑split theoretical price$25.00USD
Post‑split market capitalization (theoretical)$2,500.00USD
Approximate cost basis per new share$10.00USD
Primary result—

Visualization

Methodology

The calculation treats a reverse split as a multiplicative factor equal to old_shares_per_new_share divided by new_shares (commonly 10:1, expressed as factor = 10). Post‑split price is computed by multiplying the pre‑split price by the factor, and post‑split share count is divided by the same factor so that market capitalization remains constant in theoretical terms.

Fractional shares arise when the post‑split share count is not an integer. Brokers handle these in different ways: cash‑out at a specified price, rounding down (forfeiting fractions), rounding up (issuing an extra share), or issuing fractional shares if supported. This tool models the cash‑out scenario explicitly and provides approximate cost‑basis conversion by multiplying the per‑share basis by the split factor.

Worked examples

Example: 1,000 shares at $2.50 with a 1‑for‑10 reverse split (factor = 10). Post‑split shares = 1000 / 10 = 100. Post‑split price = $2.50 * 10 = $25.00. Market cap remains $2,500.

If the post‑split shares calculation results in a fractional amount (e.g., 101.3 new shares), a broker may cash out 0.3 shares. At a cash‑out price of $25.00 the cash‑out value would be $7.50.

Further resources

External guidance

Expert Q&A

Will market capitalization change after a reverse split?

Theoretical market capitalization remains the same because share count decreases while price increases by the same factor. In practice small differences can arise from market movements, rounding, cash‑out amounts, and transaction fees.

How are fractional shares handled?

Broker policies vary. Common treatments are cash‑out of fractional shares, rounding down to the nearest whole share, rounding up, or issuing fractional shares when supported. Use the cash‑out option to model the cash payment you would receive for fractions.

Does a reverse split change the total cost basis of my position?

Total cost basis of your entire holding should remain constant absent cash‑out events. Per‑share cost basis is adjusted by the split factor; when fractional shares are cashed out you may need to allocate a portion of your total basis to the cash‑out amount for tax reporting. Consult a tax advisor for exact allocation rules.

Is the cash‑out price always the post‑split market price?

Not always. Brokers or the company may specify a cash‑out method or price; some use the market close price, others use a calculation. Enter the price your broker or company uses into the cash‑out price field to model the exact payout.

How accurate are these computations?

This tool provides theoretical and planning‑level estimates. It follows arithmetic rules for splits and rounding but does not model market microstructure, fees, taxes, or broker‑specific rounding/settlement nuances. See accuracy caveats and standards references below.

Sources & citations