In a reverse stock split:

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In a reverse stock split, the number of shares outstanding decreases but owners' equity is unchanged. This means that each outstanding share is converted into a higher value share, resulting in a lower number of shares outstanding. For example, in a 1-for-5 reverse stock split, every 5 shares of the company's stock will be combined into 1 share, resulting in a reduction of the total number of outstanding shares by 80%. However, the total value of the company remains unchanged, so owners' equity is also unchanged.

In a Reverse Stock Split