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How can a company reduce my number of shares?

Personal Finance & Money Asked on January 10, 2021

I purchased 1000 shares of ACB stock a little over a year ago. I have now learned I have only 83 shares of stock. How can the company take away over 900 shares of my stock?

2 Answers

Sometimes companies need to reduce the total number of outstanding shares. To do that, they do a reverse split. For example, after a 10:1 reverse split, your 1000 shares would become 100. That sounds like something went away, but if that's what happened, everyone has 1/10 as many shares as they had before the split. The result is a wash: you have 1/10 as many shares, but they're worth 10 times as much.

EDIT: as D Stanley points out in a (now deleted) comment, this is exactly what happened: your company did a 12:1 reverse split, so your 1000 shares became 83 shares, with a bit left over, which ordinarily would have been paid to your account in cash.

Answered by Pete Becker on January 10, 2021

On April 13, 2020, Aurora Cannabis announced its intention to consolidate its shares on a 12 to 1 basis. Share consolidations are also known as reverse stock splits or reverse splits. Aurora Cannabis Provides Update on Initiatives to Strengthen Liquidity, Business Transformation Plan and COVID-19 Operational Response:

Aurora today announced that its Board of Directors has approved, subject to required regulatory and stock exchange approvals, a plan to consolidate all of its outstanding Common Shares on the basis of 1 Common Share for every 12 Common Shares currently outstanding (the "Consolidation"), with such Consolidation to be effective on or about May 11, 2020. [...]

On May 9, 2020, Aurora published another press release confirming the share consolidation. Aurora Cannabis Confirms Share Consolidation Effective Date:

EDMONTON, May 8, 2020 /CNW/ - Aurora Cannabis Inc. (the "Company" or "Aurora") (NYSE | TSX: ACB), the Canadian company defining the future of cannabis worldwide, confirms today that it has received all necessary approvals for its previously announced consolidation of the common shares (the "Common Shares") of the Company on a 12 to 1 basis (the "Consolidation") and confirms that the Consolidation will be effective on May 11, 2020 (the "Effective Date"). [...]

I would like to suggest that you keep track of the press releases of the companies you own. You can do this by signing up to the investor mailing list, by subscribing to an RSS feed, or by periodically checking the investor relations website.


I purchased 1000 shares of ACB stock a little over a year ago. I have now learned I have only 83 shares of stock. How can the company take away over 900 shares of my stock?

You now have 83 shares as a result of having every 12 shares consolidated into one share (1000 / 12 = 83 13). The remaining 13 shares were converted into cash during the share consolidation.

Answered by Flux on January 10, 2021

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