How does a reverse stock split work for current employees?

Twitter NKCu75
Apr 23 3 Comments

How does the reverse stock split work for current employees? Do they get an updated offer letter to each one of them saying that the number of stocks they are getting is going to be 1/3 of the original number of units? And for those who stayed at company for more than a year and already got the granted units, does Pinterest get the other 2/3 of units back from employees?

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TOP 3 Comments
  • Facebook / Eng yMvB87
    Everything gets reverse split but the price increases. So in effect, the value is still the same in the end.

    (total # of shares before)*(price per share) = market cap

    (total # of shares before/RS split factor)(price per share * RS split factor) = market cap

    Both will be the same
    Apr 23 0
  • GoodRx BobAxelrod
    It's amazing how many people think they get screwed by stock splits even though it's a neutral event.
    Apr 23 0
  • Google praise
    Yes. Everything gets recalculated - vested an unvested.
    Apr 23 0

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