Over 700 finance terms, Shmooped to perfection.
Sort of like a stock regeneration. Instead of 1 share becoming 2, 2 shares become 1. Just like with regular stock splits, there is no economic impact from this action; it's really just window-dressing. If you had 20 shares at $10 before the reverse, you'll have 10 shares worth $20 after, but your investment is still worth $200.