A reverse stock split cuts your share count and raises the per-share price by the same ratio, so the market value of your position is unchanged at the moment the split takes effect. In a 1-for-20 split, 1,000 shares become 50 and a $0.50 quote becomes $10.00. What happens after that moment is a different question, and three 2026 splits show how far the new shares can travel.
The split itself is pure arithmetic. The trading that follows is not. Here is what a holder actually gets, where to find it in the filing, and what Alight, Purple Innovation and BRC did after their splits.
The ratio math in one table
Three formulas cover every reverse split:
- New share count = old shares ÷ ratio
- New price = old price × ratio
- Position value = shares × price, which is the same before and after at the effective time
A hypothetical holder with 1,000 shares at $0.50 ($500 total) would see this:
| Hypothetical ratio | Shares after | Price after | Position value |
|---|---|---|---|
| 1-for-10 | 100 | $5.00 | $500 |
| 1-for-20 | 50 | $10.00 | $500 |
| 1-for-25 | 40 | $12.50 | $500 |
Your slice of the company doesn't change either. Purple Innovation's July 16, 2026 8-K says its split "will affect all of the Company’s stockholders uniformly and, except for adjustments resulting from the treatment of fractional shares, will not affect any stockholder’s percentage ownership interests."
Three real 2026 reverse splits, by the filings
These counts come from each company's 8-K and 10-Q cover pages. The "before" and "after" figures carry different dates, so they also include any shares issued in between.
| Company | Ratio | Effective | Split-adjusted trading began | Class A shares before | Class A shares after |
|---|---|---|---|---|---|
| Alight ($ALIT, NYSE) | 1-for-20 | 5:00 p.m. ET, June 30, 2026 | July 1, 2026 | 526,847,029 (Apr 30) | 26,419,410 (Jul 30) |
| Purple Innovation ($PRPL, Nasdaq) | 1-for-25 | 11:59 p.m. ET, July 19, 2026 | July 20, 2026 | 108,825,636 (Apr 27) | about 4,353,026 (8-K); 4,353,109 (Aug 10) |
| BRC Inc. ($BRCC, NYSE) | 1-for-10 | 5:01 p.m. ET, Aug 21, 2026 | Aug 24, 2026 | 119,819,977 (Jul 29) | 12,055,408 (Oct 28) |
Sanity check: 526,847,029 ÷ 20 is about 26.34 million, 108,825,636 ÷ 25 is about 4.35 million, and 119,819,977 ÷ 10 is about 11.98 million. All three are close to the reported "after" counts.
Fractional shares: cash in lieu or round up
Ratios rarely divide evenly. A hypothetical 1,010 shares in a 1-for-25 split works out to 40.4 new shares. Each 8-K tells you what happens to the 0.4:
- Purple (round up): "The Company will not issue any fractional shares in connection with the Reverse Stock Split. Instead, the number of shares will be rounded up to the next whole number." The hypothetical holder ends up with 41.
- BRC (cash from a pooled sale): its transfer agent "will aggregate the fractional shares of Class A Common Stock that otherwise would have been issued and sell those shares in the open market." Holders then get their "proportionate share of the proceeds."
- Alight (cash at fair value): holders "will receive a cash payment in an amount equal to the fair value thereof as of the Effective Time (as determined by the Board) (without interest)."
Cash in lieu of a fractional share can be a taxable event. This isn't tax advice, so check with a tax professional.
New CUSIP, effective date and "split-adjusted basis"
Two dates matter. The effective time is when the charter amendment combines the shares, and that is often after the close or late at night. The first split-adjusted session is the first day the new price prints. For BRC, the split took effect at 5:01 p.m. ET on Friday, August 21, and the stock began trading "on a split-adjusted basis" on Monday, August 24.
The ticker usually stays the same, but the CUSIP changes. The new numbers were 01626W 200 for Alight, 74640Y304 for Purple and 05601U204 for BRC. If your shares sit with a broker, Purple's 8-K says holders "will have their positions automatically adjusted," subject to "brokers’ particular processes."
Watch the charts. Yahoo restates closes from before the split. BRC's 8-K gives its August 21 close as $0.88, while Yahoo now shows that same session as $8.80, split-adjusted. Filings get restated too: Purple's Q2 10-Q presents share and per-share amounts "as though the Reverse Stock Split has been effected prior to all periods presented."
Options, warrants and equity awards
Company-issued securities adjust under their own terms. Purple says "All warrants, stock options, and other securities" were "proportionally adjusted, in accordance with their terms." BRC says options and RSUs get "proportionate adjustments" to "exercise or conversion prices."
Exchange-listed options work differently. The strike price often stays put while the deliverable shrinks. According to the June 30, 2026 BOX/OCC memo for Alight:
- ALIT options became ALIT1.
- The new deliverable is "5 (New) Alight, Inc. (ALIT) Class A Common Shares."
- Strikes were unchanged. For example, a $1.00 strike for January 15, 2027 stayed $1.00.
The arithmetic: one contract now pays $100 for 5 shares, which works out to $20 per new share. The memo prices the adjusted contract as "ALIT1 = 0.05 (ALIT)."
Authorized vs outstanding shares
Outstanding shares are the ones already issued. Authorized shares are the ceiling the charter allows. A reverse split always cuts the first. Whether it touches the second depends on the charter amendment:
- Alight cut authorized Class A shares from 1,000,000,000 to 50,000,000, in proportion with the split. That leaves 50 million authorized against 26,419,410 outstanding on July 30, or about 1.9 times.
- Purple's Q2 10-Q lists 210.0 million authorized Class A shares and 4.4 million outstanding at June 30, 2026, about 48 times.
- BRC's amendments "did not affect the number of authorized shares."
A large gap between authorized and outstanding is room to issue new stock without another shareholder vote on the share limit. For how share count, float and insider holdings interact, see float vs outstanding shares.
Why companies do it
In two of these three examples, the filings tie the split to listing standards. In Purple's case, a Nasdaq Hearings Panel required a closing bid of at least $1.00 for ten consecutive trading days by July 31, 2026. Alight said its split affirms its "commitment to remain on the NYSE." The compliance clock itself is covered in the Nasdaq minimum bid price rule.
What the prices did after (split-adjusted Yahoo closes)
All figures below are Yahoo daily closes, which are split-adjusted. The "high" and "low" columns are the highest and lowest closes from the first split-adjusted session through November 4, 2026.
| Ticker | Last pre-split close (adjusted) | First split-adjusted close | Highest close after | Lowest close after | November 4, 2026 close | Change vs last pre-split |
|---|---|---|---|---|---|---|
| $ALIT | $11.20 (Jun 30) | $13.73 (Jul 1) | $21.94 (Jul 14) | $7.95 (Oct 19) | $12.75 | +13.8% |
| $PRPL | $7.25 (Jul 17) | $6.12 (Jul 20) | $9.75 (Aug 4) | $1.87 (Oct 9) | $2.80 | −61.4% |
| $BRCC | $8.80 (Aug 21) | $9.33 (Aug 24) | $12.99 (Oct 29) | $8.04 (Aug 31) | $9.75 | +10.8% |
Three splits produced three different paths:
- Alight closed 22.6% above its adjusted pre-split level on day one. It reached $21.94 on July 14, nearly double the adjusted pre-split level, then fell to a low of $7.95 on October 19.
- Purple opened at $7.12 on July 20, according to its own 8-K, and closed at $6.12. On September 30, Nasdaq notified it that its Market Value of Publicly Held Shares had been under $15 million for 30 consecutive business days. A split can fix a share price without fixing what the market will pay for the company.
- BRC closed between $8.04 and $9.89 through September, climbed to $12.99 on October 29, then closed at $9.77 on November 3.
For context, the S&P 500 went from 7,499.36 on June 30 to 7,688.62 at the November 4, 2026 close. Three examples are too few to draw a general rule from, so we don't.
Common mistakes
- Thinking the split changes what you own. At the effective time, it doesn't. Fewer, pricier shares add up to the same dollars.
- Ignoring the dilution that can follow. A higher share price and spare authorized shares make it easier to sell new stock. Learn how an at-the-market offering shows up in filings.
- Comparing a split-adjusted chart with an old quote. BRC's $0.88 and Yahoo's $8.80 describe the same close.
- Trading an adjusted option like a standard one. One ALIT1 contract delivers 5 shares, not 100.
Checklist: reading a reverse split 8-K
- Find Item 5.03 (charter amendment) and Item 3.03 (holder rights). Our 8-K reading guide maps the items.
- Note the ratio, the effective time and the first split-adjusted session.
- Read the fractional-share language: rounding up, a pooled sale, or a board-set price.
- Check whether authorized shares were cut or left alone.
- Note the new CUSIP and confirm your broker shows the new share count.
- Read the adjustment notice for any options or warrants you hold.
- Check the next 10-Q cover for the post-split share count.
More explainers and market coverage are on the I'M A STOCK TRADER homepage.
Bull/Bear Verdict
Bull Case: The math is fully disclosed. The ratio, effective time, fractional-share treatment, CUSIP and authorized-share change all sit in one 8-K, so a trader can rebuild the position, the chart and the options deliverable precisely, as Alight, Purple and BRC show.
Bear Case: A split moves the decimal point, not the business. Purple fell 61.4% from its adjusted pre-split close by the November 4, 2026 close, and it received a market-value notice from Nasdaq on September 30. A higher price and unused authorized shares can also make later dilution easier.
FAQ
Does a reverse stock split change what my shares are worth?
Not at the effective time. Shares are divided by the ratio and the price is multiplied by it, so the value is unchanged. After that, the price trades freely, as the three 2026 examples above show.
What happens to fractional shares in a reverse split?
It depends on the 8-K. Purple rounded up to the next whole share. BRC's transfer agent sold the pooled fractions and paid out the proceeds. Alight paid cash at a fair value set by its board.
Do I need to do anything if my shares are at a broker?
Usually not. Purple's 8-K says broker-held holders "will have their positions automatically adjusted," subject to the broker's own process. Check that your account shows the new share count and price.
What happens to my options after a reverse split?
Company-issued options and warrants adjust under their terms. Listed options may become adjusted contracts. Alight's became ALIT1, delivering 5 new shares at unchanged strikes.