When a company such as PKD 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 PKD split history from start to finish, an original position size of 1000 shares would have turned into 66.6666666666667 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into PKD shares, starting with a $10,000 purchase of PKD, presented on a split-history-adjusted basis factoring in the complete PKD split history.

About PKD

Parker Drilling is a holding company. Through its subsidiaries, Co. is a provider of contract drilling and drilling-related services and rental tools and services. Co. has two business lines: Drilling Services, in which Co. drills oil, natural gas and geothermal wells with both Co.-owned rigs and customer-owned rigs in addition to providing project-related services, such as engineering, project management, operations execution, and quality and safety management; and Rental Tools Services, which provides rental equipment and services to exploration and production companies, drilling contractors, and service companies on land and offshore in the U.S. and select international markets. According to our PKD split history records, PKD has had 1 split.

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