When a company such as DRWI conducts a reverse share split, it is usually because shares have fallen to a lower per-share pricepoint than the company would like. This can be important because, for example, certain types of mutual funds might have a limit governing which stocks they may buy, based upon per-share price. The $5 and $10 pricepoints tend to be important in this regard. Stock exchanges also tend to look at per-share price, setting a lower limit for listing eligibility. So when a company does a reverse split, it is looking mathematically at the market capitalization before and after the reverse split takes place, and concluding that if the market capitilization remains stable, the reduced share count should result in a higher price per share.

Looking at the DRWI split history from start to finish, an original position size of 1000 shares would have turned into 40 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into DRWI shares, starting with a $10,000 purchase of DRWI, presented on a split-history-adjusted basis factoring in the complete DRWI split history.

About DRWI

DragonWave is engaged in developing next-generation broadband wireless backhaul and pseudowire equipment. Co. provides high-capacity Ethernet microwave solutions that drive next-generation IP networks and pseudowire technology which allows carriers to address the increasing need to carry legacy time division multiplexing traffic over a packet based network. Co.'s carrier-grade point-to-point Ethernet microwave systems transmit broadband voice, video and data, enabling service providers, government agencies, enterprises and other organizations to meet their increasing bandwidth requirements rapidly and affordably. According to our DRWI split history records, DRWI has had 2 splits.

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