When a company such as LBIX 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 LBIX split history from start to finish, an original position size of 1000 shares would have turned into 200 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into LBIX shares, starting with a $10,000 purchase of LBIX, presented on a split-history-adjusted basis factoring in the complete LBIX split history.

About LBIX

Leading Brands and its subsidiaries are engaged in beverage bottling, distribution, sales, merchandising, brand development and brand management of beverage products. Co. has evolved into an integrated bottling and distribution operation with customers across Canada, the western United States, and Asia. Co. sells branded beverage products through its Integrated Distribution System (IDS) of distributors, wholesalers, and grocery chains. Its principal product lines include juices and other premium beverages. The bottling plant provides bottling services for Co.'s own products and for an external customer. According to our LBIX split history records, LBIX has had 1 split.

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