Reverse stock splits are initiated when a stock is selling at a very low price to appear respectable.

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Reverse stock splits are often used to boost a company's stock price by reducing the number of outstanding shares and increasing the price per share. This is typically done to avoid being delisted from stock exchanges or to meet the minimum price requirements of institutional investors. Reverse stock splits typically occur when a company's stock price has fallen significantly and is trading at a very low price per share.

Reverse Stock Splits Are Initiated When a Stock Is Selling