To decrease the number of shares owned by each investor so that small investors can be bought out is a valid reason for a reverse stock split.

Question

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A reverse stock split is a corporate action in which a company reduces the number of outstanding shares by combining multiple existing shares into a single new share. This can be done for a variety of reasons, including to increase the share price, to reduce the number of shares outstanding, or to make the stock more attractive to smaller investors.

To Decrease the Number of Shares Owned by Each Investor