What was the impact to Two Harbors' outstanding common stock?
Following the Reverse Stock Split, you owned one-half of the number of shares that you held prior to the Reverse Stock Split, although the shares you owned following the Reverse Stock Split continue to represent that same percentage of the total number of outstanding shares of Two Harbors common stock. Accordingly, the proportionate ownership of Two Harbors did not change as a result of the Reverse Stock Split.
You own 1,000 shares of Company X, which has 1,000,000 shares of common stock outstanding (or a 0.10% percentage ownership in the company).
After a 1-for-2 reverse stock split, you own 500 shares of Company X, which now has 500,000 shares of common stock outstanding (or a 0.10% percentage ownership in the company).
Before and after the reverse stock split, you had the same 0.10% ownership percentage of Company X.
Note that fractional shares were not be issued. See the question titled “How were fractional shares of Two Harbors common stock treated in the Reverse Stock Split?”
The Reverse Stock Split will have the effect of reducing the total number of Two Harbors’ issued and outstanding common stock by half, from approximately 349 million shares to approximately 175 million shares. As a result of the reduction in the number of shares of common stock, the price per share of Two Harbors common stock is expected to increase proportionately upon the completion of the Reverse Stock Split.