When a company such as WHX 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 WHX split history from start to finish, an original position size of 1000 shares would have turned into 333.333333333333 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into WHX shares, starting with a $10,000 purchase of WHX, presented on a split-history-adjusted basis factoring in the complete WHX split history.

About WHX

Whiting USA Trust I is a statutory trust that acquire and hold net profits interest (NPI) pursuant to a conveyance to Co. from Whiting Oil and Gas Corporation. The NPI represents the right for Co. to receive 90.0% of the net proceeds from Whiting Petroleum Corporation's interests in certain existing oil, natural gas and natural gas liquid producing properties (the underlying properties). The underlying properties are located in the Rocky Mountains, Mid-Continent, Permian Basin and Gulf Coast regions. As of Dec 31 2013, these underlying properties included interests in 3,062 gross (351.6 net) producing oil and gas wells located in 14 states. According to our WHX split history records, WHX has had 1 split.

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