When a company such as Intrepid Potash 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 IPI split history from start to finish, an original position size of 1000 shares would have turned into 100 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into Intrepid Potash shares, starting with a $10,000 purchase of IPI, presented on a split-history-adjusted basis factoring in the complete IPI split history.

About Intrepid Potash

Intrepid Potash is a mineral company that delivers potassium, magnesium, sulfur, salt, and water products. Co. is a producer of muriate of potash (sometimes referred to as potassium chloride or potash), which is applied as a nutrient for healthy crop development, utilized in several industrial applications, and used as an ingredient in animal feed. In addition, Co. produces a fertilizer, Trio®, which delivers three primary nutrients, potassium, magnesium, and sulfate, in a single particle. Co. also provides water, magnesium chloride, brine and various oilfield products and services. Co.'s three primary products are potash, Trio®, and water. According to our IPI split history records, Intrepid Potash has had 1 split.

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