In finance, a reverse stock split or reverse split is a process by which shares of corporate stock are effectively merged to form a smaller number of proportionally more valuable shares.
[1] The "reverse stock split" appellation is a reference to the more common stock split in which shares are effectively divided to form a larger number of proportionally less valuable shares.
Typically, the exchange temporarily adds a "D" to the end of a ticker symbol during a reverse stock split.
There is a stigma attached to doing a reverse stock split, as it underscores the fact that shares have declined in value, so it is not common and may take a shareholder or board meeting for consent.
[1] As an example of how reverse splits work, ProShares Ultrashort Silver (ZSL) underwent a 1-10 reverse split on April 15, 2010, which grouped every 10 shares into one share; accordingly, this multiplied the close price by 10, so the stock finished at $36.45 instead of $3.645.