Glossary

A company's annual filing to the SEC. The cover page lists the most recent share-outstanding count, and the financial notes detail authorized shares, warrants, and option grants.

A company's quarterly filing to the SEC. Same structure as the 10-K but covers a single quarter. Useful for the latest outstanding share count between annual reports.

A quarterly filing that institutional investment managers with over $100 million in assets must submit, disclosing their equity holdings. Used to identify which institutions hold large positions in a stock.

The filing that confirms a company is actively selling new shares under a previously approved shelf registration. A 424B in the same window as a reverse split is a serious red flag — the company is creating supply right when the float is supposed to be tight.

The filing companies submit to the SEC within 4 business days of a material event. For reverse split research, this is the document that confirms a split is happening — look under Item 5.03.

A type of share sale where the company drips new shares into the open market at whatever price the stock is trading at on any given day. Disclosed in S-3 filings and 424B5 supplements. Particularly destructive in reverse split trades because the company sells directly into rallies.

The maximum number of shares a company is legally allowed to ever create, as set in its articles of incorporation. Increasing this number requires a shareholder vote.

The difference between authorized and outstanding shares — the headroom a company has to issue new shares without going back to shareholders. A wide gap means high dilution potential. A narrow gap means the company would need a new vote before issuing more.

A continuation chart pattern where price spikes up, consolidates in a tight downward-sloping range (the 'flag'), then breaks out higher. In reverse split trading, the bull flag is one of the documented Phase 2 patterns (P2-B), usually forming 1–3 days after the effective date.

A 9-character identifier that uniquely tags every security in the US. A reverse split usually triggers a new CUSIP — the old one is retired. Always verify the new CUSIP in the 8-K before trading.

The filing companies send shareholders before an annual meeting or special vote. When a reverse split requires shareholder approval, the DEF 14A contains the detailed rationale, the approved ratio range, and the authorized share count requested.

A definitive revised proxy statement — a DEF 14A that was amended after initial filing. Worth checking when present; revisions often signal pushback from large shareholders or a change in the proposal.

An increase in a company's share count that reduces existing shareholders' percentage ownership. In reverse split trading, dilution from an active S-1/S-3/424B can erase the tight-float advantage that makes the setup tradeable in the first place.

A program where shareholders automatically reinvest dividends to buy more shares. DRIP-enrolled shares can add modestly to the float over time. Less common as a major float consideration than warrants and options.

The SEC's free, public database of all corporate filings. Live at edgar.sec.gov. Every filing referenced anywhere in Tier 1 — 8-K, 10-K, DEF 14A, S-1, S-3, 424B, Form 4, 13F — is accessible here, free, no signup.

The exact date a reverse split takes effect — the trading day when old shares become new shares at the announced ratio. This is Day 0 in the RSRC pattern framework. The shorter the window between announcement and effective date, the better the structural setup.

The truly tradeable share count after a reverse split, accounting for the ratio reduction, insider lockups, institutional lockups, and treasury holdings. Almost always much smaller than the post-split outstanding count. This is the number that determines how easily price can move.

Outstanding shares minus restricted shares (insider lockups, institutional lockups, large block holders). The number of shares actually available to be bought and sold in the open market. The most important number in reverse split trading.

The filing insiders (directors, officers, >10% shareholders) must submit when they buy or sell shares of their own company. Used to identify which shares are locked up by insiders versus which are freely tradeable.

Shares held by directors, officers, and 10%+ shareholders. Typically subject to SEC Rule 144 trading restrictions and not part of the tradeable float. Tracked via Form 4 filings.

Shares held by investment managers, pension funds, mutual funds, and similar institutions. Disclosed quarterly via 13F filings. Not all institutional shares are restricted, but they should be conservatively excluded from float calculations.

All shares a company has ever created and distributed — to founders, investors, employees, anyone. Includes shares the company later bought back (treasury). Usually slightly greater than outstanding shares.

The line-item code in the 8-K under which reverse splits are reported. If an 8-K doesn't contain Item 5.03 language, it's not a reverse split filing.

A period during which certain shareholders (often insiders, recent IPO investors, or institutions) are contractually prohibited from selling their shares. Locked-up shares are excluded from float calculations.

A notification of late filing for the 8-K. When a company files an NT 8-K before the actual 8-K, it's often a distress indicator — the company is asking for an extension on a material disclosure.

The most powerful documented reverse split pattern (P2-A in the RSRC framework). Forms on the effective-date morning when tight post-split float, short-borrow difficulty, and retail/algo buying pressure combine into rapid upside moves. Hallmarked by Level 2 'ask wipe' events.

Issued shares minus treasury shares. The number of shares actually held by parties outside the company itself. Used to calculate market cap (price × outstanding).

The framework for recognizing which of the 12 documented reverse-split patterns is forming on a given setup. Patterns are categorized by phase relative to the effective date — pre-split (P1), day-of-and-after (P2), and unwind (P3).

A preliminary proxy statement, filed before the definitive version (DEF 14A). Sometimes contains useful early information about a proposed reverse split before the final proxy is locked in.

Shares held by insiders, founders, or institutions subject to lock-up periods that prevent free trading. Restricted shares are subtracted from outstanding to calculate float.

A corporate action that consolidates a company's existing shares into a smaller number of more valuable shares. A 1:20 reverse split turns 20 old shares into 1 new share at 20× the price. Doesn't change market cap; does change float.

The SEC registration statement filed for a company's first public offering of shares. After IPO, additional offerings typically use S-3 instead. An active S-1 can indicate dilution capacity.

A short-form registration statement filed by companies that already trade publicly. An S-3 creates a shelf registration — pre-approved capacity to sell new shares whenever the company chooses. The S-3 itself doesn't sell anything; the 424B filings that follow do.

Pre-registered share capacity that a company can deploy to the market on its own timeline, typically over 2–3 years. Established via S-3 filing. Acts as ready-to-sell ammunition that can break a reverse split trade.

A rapid price increase driven by short sellers covering their positions, typically forced by margin calls or share-borrow recalls. Reverse splits can trigger short squeezes when the post-split float becomes too tight for shorts to source borrowable shares.

The mathematical relationship that converts old shares to new shares in a reverse split. A 1:20 ratio means 20 old shares become 1 new share. The higher the ratio, the more dramatic the float compression — and typically the better the trading setup.

A common ticker modification where the letter 'D' is appended to a stock's symbol for the first 20 trading days after a reverse split (e.g., XYZ becomes XYZD). Used by data providers to flag the transition. Brokers may handle the symbol differently — verify before trading.

Shares a company has issued and later bought back, but not retired. Held in 'treasury.' Not counted as outstanding for market cap purposes but still part of issued shares.

An intraday benchmark price calculated as total dollars traded divided by total shares traded. Often used as a soft stop or trend reference in reverse split day trades — staying above VWAP signals continued strength.

A contract giving the holder the right to buy shares at a fixed price for a set period. Warrants represent potential future dilution — if exercised, they create new shares. Included as overhang in float calculations.