This Century-Old Financial Giant's Reverse Stock Split Leaves Investors Puzzled
Why would a company pay a big dividend and then do a tiny reverse split?
This Century-Old Financial Giant's Reverse Stock Split Leaves Investors Puzzled
Overview
Thomson Reuters (NASDAQ: TRI) is a large business information services company. The company has been performing very well lately, with revenues up 10% year over year in the first quarter of 2026. Earnings rose 7%, and the company announced a 10% dividend hike during the quarter. However, something odd was announced in May: a big special dividend coupled with a highly unusual stock split. What's going on?
Reverse stock splits are usually a bad sign. Reverse stock splits often occur because a company is at risk of being delisted from a major stock exchange due to a low stock price (typically below $1 per share), an event that would make raising capital dramatically more difficult. Companies in this position will normally do something like exchange 10 shares of stock for one new share. By contrast, regular stock splits are typically considered a good sign, with companies often splitting one share into two.
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Originally published at www.fool.com.
