General Electric, with a share price of about $13 and a market capitalization of $117 billion, currently has 8.8 billion shares outstanding. Given the large number of shares outstanding, the company has proposed a 1-for-8 reverse stock split. The stated purpose of the stock split is to reduce the number of shares outstanding to be more comparable to other companies with a similar market capitalization. Of course, the reverse stock split will also increase the share price by a multiple of eight.
