In the
above scenario, if those 100,000
shares outstanding that initially traded at $ 10 per
share fell to $ 2 per
share, and the company wanted to restore the price of the stock, it might issue a 1:5 reverse stock
split in which the
share count of the business would be reduced to 20,000
shares outstanding that trade at a price of $ 20 per
share.
Similar with the
above case, if the total outstanding
shares is 10,000, then after stock
split of 2:1, the total
shares will increase to 20,000 and stock price will get halved.