When a company such as NOVN 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 NOVN 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 NOVN shares, starting with a $10,000 purchase of NOVN, presented on a split-history-adjusted basis factoring in the complete NOVN split history.

About NOVN

Novan is a medical dermatology company focused on developing and commercializing therapeutic products for skin diseases. Co. is developing SB206 (berdazimer gel, 10.3%) as a topical prescription gel for the treatment of viral skin infections, with a focus on molluscum contagiosum. Co.'s commercial portfolio includes six prescription drugs. These prescription dermatology therapies are targeted to patients with plaque psoriasis, rosacea, and acne. The product portfolio includes Wynzora Cream (calcipotriene and betamethasone dipropionate cream), Rhofade (oxymetazoline hydrochloride cream, 1%), and Minolira (biphasic minocycline hydrochloride immediate release/extended release tablets). According to our NOVN split history records, NOVN has had 1 split.

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