A:

A reverse split is a corporate action whereby a company reduces the number of shares outstanding and increases the price of its stock. A company may decide to use a reverse split to shed its status as a penny stock, or to avoid being delisted. A common type of reverse stock split is 1:2, which means that each investor receives one share for every two that he or she already holds. In other words, the investor gets half as many shares, but they're worth twice as much as before.

As the question states, a company that has undergone a reverse stock split often gets the letter "D" attached to the end of its ticker symbol. This letter is used to designate a company that is undergoing a stock split of some sort (most often a reverse split), or some form of corporate reorganization. This letter is generally attached to the end of the ticker for approximately 20 trading days before it's removed.

For further reading, see Understanding The Ticker Tape, What Are Corporate Actions? and Understanding Stock Splits.

RELATED FAQS
  1. How does a stop-loss order work, and what price is used to trigger the order?

    A stop-loss order, or stop order, is a type of advanced trade order that can be placed with most brokerage houses. The order ... Read Answer >>
  2. Do hedge funds have ticker symbols?

    Discover whether or not hedge funds have ticker symbols, where you can find ticker symbols and the significance of a ticker ... Read Answer >>
  3. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Answer >>
  4. What are some of the most common technical indicators that back up Doji patterns?

    Learn important technical indicators that reinforce a doji candlestick pattern to take advantage of profitable trading opportunities. Read Answer >>
  5. Tame Panic Selling with the Exhausted Selling Model

    Discover what the exhausted selling model is and how it can be used by traders who are looking to profit from the panic sale ... Read Answer >>
  6. Point and Figure Charting Using Count Analysis

    See how traders use count analysis on point and figure charts, and learn why this method differs from more traditional types ... Read Answer >>
Related Articles
  1. Chart Advisor

    Sector Headwinds Buffeting First Solar (FSLR, TAN)

    First Solar has entered a new downtrend after failing to break out above two-year resistance.
  2. Chart Advisor

    Better Buy: Home Depot or Lowe's? (HD, LOW)

    Home Depot and Lowe’s have risen to resistance levels that could yield fresh trend advances.
  3. Chart Advisor

    3 Short Sales in the Apple Ecosystem (AAPL, SWKS)

    Deteriorating sentiment should offer profitable short sales on the key Apple suppliers.
  4. Chart Advisor

    Amazon Levels to Watch After Earnings (AMZN)

    An Amazon rally above 650 after earnings should open the door to a test of the bull market high.
  5. Chart Advisor

    Nasdaq-100 Weakness Waving Red Flags (QQQ, SPY)

    The Nasdaq-100 is lagging blue chip and small cap indices, signaling a bearish divergence that could end the recovery wave.
  6. Fundamental Analysis

    Alcoa vs. BHP Billiton: Which Is Better for My Portfolio?

    Obtain an up-to-date overview of BHP Billiton and Alcoa, Inc., two key players for investors seeking exposure to the aluminum market to consider.
  7. Chart Advisor

    Wait for a Pullback to Buy Pan American Silver (PAAS, SLV)

    Pan American Silver is trading just two points from resistance, warning sidelined players to wait for a substantial pullback.
  8. Chart Advisor

    Apple Levels to Watch After Earnings (AAPL)

    Apple needs to trade above 115 or below 90 to escape magnetism created by technical conditions in place since a 2015 breakdown.
  9. Chart Advisor

    Oil Services Fund Still Hasn't Entered a New Uptrend

    Market Vectors Oil Services ETF needs to rally above 33 to end the two-year downtrend.
  10. Chart Advisor

    U.S. Steel at Cusp of Multiyear Uptrend (X)

    U.S. Steel should offer an excellent buying opportunity when it pulls back into the mid-teens.
RELATED TERMS
  1. Bunny Market

    Bunny market describes a stock market that does not have an obvious ...
  2. Illiquid

    The state of a security or other asset that cannot easily be ...
  3. Outperform

    An analyst recommendation meaning a stock is expected to do slightly ...
  4. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure ...
  5. Oversold Bounce

    An oversold bounce is a rally in prices that occurs due to the ...
  6. Relief Rally

    A relief rally is an increase in market prices that occurs because ...

You May Also Like

Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center