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Finance

Can Stocks Go Negative and What Happens When Prices Fall to Zero?

If a stock price falls to zero, you lose all of your investment in the company. However, stock prices don’t usually fall to zero even if the company goes bankrupt. The company still has some value. One example of a stock that has fallen to almost zero is Helios and Matheson Analytics. The parent company of MoviePass trades at $0.00050 in OTC markets. That’s as near to zero as you can get.

In reality, stock exchanges delist shares before they fall to zero. As a result, many companies with low stock prices go for a reverse stock split. In a reverse stock split, the company lowers its outstanding shares by consolidating them. In June, Office Depot announced a reverse stock split. In 2019, Blue Apron also announced a reverse stock split.

In contrast, companies with high stock prices split them to increase liquidity. This year, Apple and Tesla have already announced stock splits. Both of the stocks have soared after the split. Apple has become the first company ever to hit a market capitalization of $2 trillion. Many people think that even Amazon should split its stock. The last time Amazon split its stock was in 1999.

View more information: https://marketrealist.com/p/can-stocks-go-negative/

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