$HIVE Blockchain Technologies Ltd.(HIVE)$

reverse stock splits are an admission of a struggling firm — a huge red flag, “Investors are well served to sell their holdings of firms announcing reverse stock splits. Investors not holding securities of those firms should refrain from buying them.”

Just as with a stock split, there’s no change to the market capitalization of a company, nor is there a change to each investor’s stake. However, they can still be a sign of trouble.

Companies may go through reverse stock splits to avoid being delisted from a stock exchange if they’re nearing the minimum share price allowed on that exchange. They also might do a reverse stock split to improve the company’s public image or draw attention from high-profile investors or analysts.