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

About SBSA

Spanish Broadcasting System is a Spanish-language media and entertainment company. As of Dec 31 2015, Co. owned and/or operated 20 radio stations in the Los Angeles, New York, Puerto Rico, Chicago, Miami and San Francisco markets, as well as three television stations, which operated as one television operation, branded as MegaTV. As part of its operating business, Co. produces live concerts and events and maintains bilingual websites, including www.LaMusica.com, Mega.tv, various station websites, as well as the LaMusica mobile app providing content related to Latin music, entertainment, news and culture. Also, Co. produces live concerts and events in the U.S., including Puerto Rico. According to our SBSA split history records, SBSA has had 1 split.

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