1-for-10, 1-for-4, 1-for-20: what a reverse split ratio does to your shares

The ratio is a division problem. In a 1-for-N reverse split, every N shares you hold become 1 share, and the price per share is multiplied by N. Your total value is unchanged at the moment it happens.

The math, worked

Say you own 1,000 shares at $0.50, so $500 in total.

1-for-2: 500 shares at $1.00 = $500.
1-for-4: 250 shares at $2.00 = $500.
1-for-8: 125 shares at $4.00 = $500.
1-for-10: 100 shares at $5.00 = $500.
1-for-15: about 67 shares at $7.50 = $500.
1-for-20: 50 shares at $10.00 = $500.

The total never changes. That is the whole point, and it is why a split is not itself a loss. What people experience as a loss is what tends to happen after, when the reason the price was low is still true.

Why companies pick a bigger ratio

The ratio is usually chosen to clear the exchange minimum of $1.00 with room to spare, because clearing it by a penny invites doing this again in six months. A company at $0.40 needs only 1-for-3 to cross $1, but will often do 1-for-10 to land near $4 and buy itself margin. A very large ratio, 1-for-20 and up, usually means the price fell a very long way, which is information in itself.

What happens to fractional shares

If your holding does not divide evenly you end up with a fraction, and companies handle it one of two ways: round up to a whole share, or pay cash for the fraction. Rounding up is common and harmless. A cash payout can be an unwelcome taxable event in a small account, and for very small holdings a cash-out provision can end the position entirely. The resolution text says which. Masonglory 1-for-8 consolidation in 2026, for instance, authorised the company to round up any fractional share rather than cash it out.

The number the ratio hides

A ratio tells you nothing about dilution by itself, because it changes the units, not the ownership. To see whether you are being diluted, compare shares outstanding across the cover pages of successive quarterly reports and adjust for the split. If a company did a 1-for-10 and the share count is back to its pre-split level a year later, it issued ten times as many shares as it had before, and your slice is a tenth of what it was.

Related reading: are reverse splits good or bad, how to see one coming, and how share dilution works.