If I short sell a stock, and the company goes through a reverse split (say 1 for 5), what happens to the share I have short? A regular split is easy, since any number of starting shares can be multiplied into the split shares. Also, a reverse split makes sense if you are long, they can give you the quotient number of shares, and give you the remainder in cash. But, for a short reverse split, where the number of shares doesn't divide evenly, what happens?
If the broker called my margin, bought back the share and returned it, I would be forced out of the position, potentially having tax implications. If the broker (exchange?) forced me to own the even number of shares to go into the split, I might also be unable to get the shares in time. Lastly, some brokers allow partial shares, which would make this okay, but I don't know of any brokers that allow partial *short* shares. What really happens?
(I did look around on Google before asking here first; apologies if this is covered elsewhere)
If the broker called my margin, bought back the share and returned it, I would be forced out of the position, potentially having tax implications. If the broker (exchange?) forced me to own the even number of shares to go into the split, I might also be unable to get the shares in time. Lastly, some brokers allow partial shares, which would make this okay, but I don't know of any brokers that allow partial *short* shares. What really happens?
(I did look around on Google before asking here first; apologies if this is covered elsewhere)