The Saudi market has seen four listed companies complete reverse stock splits, with their nominal values and procedural dates amended after obtaining all necessary approvals and completing the required regulatory procedures.

Anam International Holding Group (listed on the Main Market, TASI) led the way. On February 12, 2025, its shareholders approved a reverse stock split in anticipation of the measures proposed by "Tadawul", restoring the nominal value to SAR 10 instead of SAR 0.50.

It was followed by Al-Baha Company, now Darb Saudi Arabia, on April 8, 2025. By resolution of its extraordinary general assembly, it raised the nominal value per share from SAR 0.10 to SAR 1.

On October 16, 2025, the general assembly of Shams Company approved a reverse stock split, raising the nominal value from SAR 0.50 to SAR 10. This followed a notice from "Tadawul" in July stating that the average closing price had fallen below the minimum threshold; the share closed at SAR 0.92 in the last session before the split.

Most recently, Mulan Steel Products Company (listed on the Nomu market) joined the list on November 2, 2026. Its general assembly approved reducing the number of shares from 26.6 million to 2.66 million, raising the nominal value from SAR 1 to SAR 10.

Al Yamamah University students discussed the financial and strategic implications of the reverse stock split, the merits of the plan to address losses, and its potential impact on the company’s future stability, as follows:

Reducing price volatility depends on improved financial performance

Student Zikra Abdul Kareem @Zikra Abdulkareem explained her view: "I believe a reverse stock split can be a positive step toward improving trading efficiency and reducing the impact of small price fluctuations, but it is not a fundamental solution to a company’s problems.

A higher share price after the split does not necessarily mean that financial or operational performance has improved.
In my view, a reverse split may make the stock less attractive to speculators and relatively more stable, but its real success depends on the company’s ability to address the reasons behind the share price decline and improve its financial results.
Therefore, I do not regard a notice from Tadawul as an immediate sell signal, but as a warning that calls for an assessment of the company’s position and future plans before making a decision.
In short, a reverse split changes how the stock looks in the market, but a company’s true strength is reflected in its performance and results, not just its share price."


A cosmetic adjustment that requires deep financial and operational measures

Student Meshail Al-Anazi @Meshail ALANazi shared her view, explaining: "I believe a reverse stock split may reduce the impact of minor price fluctuations and make a stock less attractive to speculators, but it does not necessarily mean the company’s position has improved.
In my opinion, a reverse split can be a positive step if accompanied by improvements in financial and operational performance.
But if it only raises the share price without addressing the reasons for its decline, it will be nothing more than a cosmetic change that brings no real long-term benefit to investors."

A regulatory measure that does not change the company’s actual value

Student Rabiah Almugait @Rabiah Almugait said: "I believe a reverse stock split is more of a regulatory measure than a financial solution, because it raises the market price per share without changing the company’s actual value or addressing its operational problems.
Genuine improvement will be evident if the company can increase revenue, improve profit margins, and reduce its losses.
Therefore, the success of a reverse split should not be measured by the price increase that follows, but by the extent to which it is reflected in the company’s performance and financial results."


Improving market efficiency by curbing intraday speculation

Student Nouf Al-Ojayan @Nouf Alojayan added: "Setting a minimum share price aims to improve market efficiency and regulate trading, while limiting sharp price fluctuations, especially in low-priced stocks.
A one-halala move can represent a large percentage change and attract short-term speculation.
This measure also helps provide investors with a more stable and transparent trading environment and strengthens confidence in the market.
However, it is important to emphasize that a minimum price does not necessarily mean a company is in good financial health.
The focus should also be on the quality of financial performance, transparency, and companies’ ability to address operational challenges—not solely on the share price."


Protecting market depth and overcoming the misleading effect of a one-halala move

Student Haifa Almutairi @Haifa Almutairi emphasized: "In my view, the reverse stock splits seen in the Saudi market, recently undertaken by companies such as Mulan, Shams, Al-Baha, and Anam, remain cosmetic price adjustments and do not, by themselves, address deep operational and financial challenges.
The Capital Market Authority set a minimum price to protect market depth and limit sharp fluctuations, while reverse splits reduce the impact of a halala and make a stock less appealing for quick speculation.
Therefore, a notice from Tadawul or a reverse split should not be treated as a definitive sell signal or a magic solution.
Instead, the move calls for examining the financial statements and the company’s ability to carry out genuine recovery plans and successful restructuring. Ultimately, the decisive factor remains the company’s performance and profitability—not merely a theoretical increase in its share price."


A regulatory tool to curb random speculation in small-cap stocks

Student Fay Al-Dossari @Fay Aldossari observed: "A reverse stock split reduces a stock’s appeal to day traders because it lessens the sharp effect of a one-halala move, making it more suitable for long-term investment.
A minimum-price requirement is a regulatory tool to protect market depth, curb artificial volatility, and prevent manipulation in small-cap stocks.
A notice from Tadawul should be treated cautiously; it generally represents a sell signal unless the company has a genuine and convincing restructuring plan.
A reverse split in itself is a cosmetic numerical adjustment that does not resolve financial crises. It becomes meaningful only when accompanied by fundamental reforms to operations and revenue."


Reassessing a company’s finances before making sell decisions

Student @أناغي عطرجي shared her view, explaining: "I believe a notice from Tadawul is not necessarily a sell signal, but a warning that calls for reassessing the stock.
In my opinion, it is best to review the company’s financial position and plan before making a decision, because a reverse stock split raises the price cosmetically but does not change the investment’s actual value.
The real challenge lies in the company’s ability to improve its performance and regain investor confidence."


Maintaining trading stability by limiting sharp fluctuations

Student Jumana Al-Shehri @Jumana Alshehri explained: "I believe a reverse stock split reduces the impact of a one-halala move, which may curb speculation and make a stock more suitable for long-term investment.
I believe the minimum-price requirement aims to maintain market stability and trading efficiency while limiting sharp fluctuations.
As for a notice from Tadawul, I do not consider it an immediate sell signal, but rather a warning to review the company’s position and post-split plan before deciding whether to sell or hold.
Finally, a reverse split by itself does not improve the company’s financial position; it only raises the price in theory. It becomes a genuine solution if accompanied by improved operational performance and profitability."


Repeated reverse splits may indicate structural financial problems

Student Rahaf Al-Anazi added: "In my view, a reverse stock split helps improve the trading mechanism and reduces the impact of small price changes on investors’ decisions, but it does not guarantee an improvement in the stock’s performance.
I believe investors should not rely on the share price alone when making decisions, but should also consider the company’s financial position and future plans.
Repeated reverse splits may also point to problems that require deeper solutions. The most important thing, therefore, is for the split to be accompanied by a genuine improvement in the company’s performance, not merely a change in price."


Aligning with the requirements of long-term investment

Student Raneem Asiri @Raneem Asiri emphasized: "In my view, a reverse stock split reduces the impact of a one-halala move on the percentage change in the share price, which may curb short-term speculation and make the stock more suitable for long-term investment.
I believe setting a minimum price aims to improve trading stability and efficiency.
As for a notice from Tadawul, I see it as a warning to review the company’s position, not as a direct sell signal.
Most importantly, a reverse split alone does not address a company’s weaknesses. It must be accompanied by improvements in financial and operational performance to constitute a genuine solution."


Operational reform as a safeguard against another share-price decline

Student Yazan Hamoud @Yazan Hamoud observed: "What caught my attention is that Shams completed a reverse stock split, yet its accumulated losses rose from SAR 71.4 million to SAR 86.7 million. This shows that raising the share price does not mean the company’s position has improved.
I believe a reverse split may curb speculation driven by one-halala price movements, but the most important factors are improved earnings and cash flows.
Without operational reform, the share price could fall again even after the reverse split is completed."


A reverse split as the first step toward restoring profitability and managing costs

Student Albatool Bedairi @Albatool Bedairi shared her view, explaining: "I believe a reverse stock split is, in itself, an adjustment to the share structure, not a remedy for operational problems.
The theoretical price may rise and the number of shares may fall without any change to the company’s economic value.
However, it could mark the beginning of a turnaround if accompanied by concrete steps to improve profitability, address losses, and manage costs.
For me, the success of a reverse split is not measured by the share-price increase following the move, but by the company’s ability to improve its financial results and generate sustainable cash flows and profits."


Monitoring financial statements to assess the value of operational measures

Student Dina Alarjani @Dina Alarjani explained: "In my opinion, a reverse stock split does not, by itself, improve a company’s financial position; it only changes the share price and the number of shares.
It may reduce the impact of a one-halala move, but a stock’s appeal ultimately depends on the company’s results and plan.
Therefore, I do not consider a notice from Tadawul sufficient reason to buy or sell.
Instead, I prefer to review the financial statements and wait to see whether the company has actually begun addressing its operational problems."


A Tadawul notice as a critical warning calling for caution and fundamental restructuring

Student Ahmed Al-Jadaan added: "Regarding a notice from Tadawul when a stock remains below SAR 1 for 15 consecutive days, I personally treat it as an immediate sell signal.
A share price falling to this level often reflects a very precarious financial position.
For example, before the notice and reverse split, Mulan had negative shareholders’ equity of around SAR 10 million.
Therefore, holding the stock after such a notice is a major risk, justified only by the existence of a clear and fundamental restructuring plan."


Assessing the prospects for a comprehensive recovery to ensure investment viability

Student @عمر الشيخ emphasized: "I believe a reverse stock split reduces the relative impact of a one-halala move and may make a stock less attractive for price speculation, but it does not guarantee that the stock will become a long-term investment.
Investors should look beyond the nominal price to market capitalization, financial results, cash flows, and the company’s ability to address its operational challenges.
I understand the minimum share-price requirement as a regulatory tool intended to promote compliance with listing requirements and limit the continued trading of shares at low levels.
Nevertheless, price stability does not necessarily mean that the company itself is stable; market efficiency also depends on disclosure, governance, and the quality of financial performance.
As for a notice from Tadawul, I do not treat it as an automatic sell signal, but as a warning that calls for a review of the company’s plan and the reasons behind the price decline.
The decision to hold or exit should be based on an assessment of risks and future prospects.
In my view, a sustainable solution requires improving revenue and margins, controlling costs, managing liabilities, and addressing accumulated losses.
This is especially important in the case of Mulan Steel Products, where the reverse split was linked to the minimum-price requirement while the company also faces deeper financial challenges."


Identifying the root causes of a share-price decline before judging a reverse split

Student Jana Al-Shahrani @Jana Alshahrani observed: "In my view, a reverse stock split may be a positive step for companies experiencing a decline in their share price, but it does not necessarily mean their financial position has improved.
I believe the most important thing is to understand why the share price fell in the first place.
If a company is suffering ongoing losses or weak revenue, a reverse split alone will not solve the problem.
But if the company uses this step as part of a clear plan to improve performance and reduce losses, it may help restore investor confidence.
Therefore, I believe the success of a reverse split is measured by the company’s results afterward, not just by an increase in its share price."


A cosmetic adjustment as a tool to curb rapid speculation

Student Fahad Al-Ruwaished shared his view, explaining: "In my opinion, a reverse stock split is merely a cosmetic adjustment to the nominal value and share structure; it does not fundamentally address operational problems. However, it reduces the stock’s appeal for quick speculation and makes it more suitable for long-term investors.
The Capital Market Authority seeks to promote trading stability and limit sharp fluctuations to protect market depth through its minimum-price requirement.
A notice from Tadawul when a share price falls below SAR 1 is also a useful warning to reassess risk, not necessarily a prompt to exit the stock immediately."


Reading market figures and their impact on stocks that have undergone reverse splits

Student Jana Al-Jebali @Jana Aljebali explained: "A reverse split addresses the price requirement only; the figures confirm that it does not address a company’s financial position.
After the splits, the share prices of companies such as Darb fell by 50%, Anam by 54%, and Shams by 34%.
This means the reverse split raised the price cosmetically, but the market repriced the stocks according to their actual financial position.
Moreover, Anam’s accumulated losses rose to SAR 70.6 million after the split, while Shams’ increased to SAR 86.7 million.
The effect of a one-halala move fell significantly, reducing price sensitivity, but the company’s position determined the share’s direction after the split.
The rule states that if the average closing price remains below SAR 1 for 15 consecutive trading days, Tadawul notifies the company and gives it three months to address the price.
Mulan received the notice on August 3 and approved the reverse split on November 2. For the company, the split is the second phase of a comprehensive six-phase plan, so it is still too early to judge the outcome."


Balancing capital protection with an assessment of recovery plans

Student Dana Al-Sadoun @Dana Alsadoun concluded the analysis by saying: "I believe a notice from Tadawul about a stock remaining below SAR 1 for 15 days does not mean investors must sell immediately.
I would rather wait until the company’s post-split plan becomes clear.
A reverse stock split is often a cosmetic way to escape a low share price and does not guarantee genuine operational improvement.
If the company presents a clear and robust recovery plan, it may be worth waiting and holding on.
But if the move is merely cosmetic, with no real prospect of profitability, exiting and protecting capital is the better decision."

Compliance with Article 32 to avoid trading suspension and off-platform trading
In a broader analysis of the regulatory aspect, financial expert Abdulaziz Khrais explained: "Many companies have been forced to consolidate the nominal value of their shares because of the Tadawul system, which came into effect in June 2025.

Article 32 specifically requires companies to maintain the minimum average closing price for their shares.

If a company’s average share closing price falls below SAR 1 for 15 consecutive trading days, Tadawul notifies the company of the decline on the next trading day.

If the company takes no action or the share price does not recover to above SAR 1, trading in the shares is suspended, after which an announcement is made that the company’s shares will be available for trading off-platform.

A prominent upcoming example is Dar Almarkabah, which has scheduled a general assembly meeting in the coming period to adjust the nominal value of its shares to comply with these regulatory requirements."

The financial impact of the sequence of restructuring measures

In an analytical perspective, financial and economic analyst Hamad Al-Saeed @Hamad Alsaeed adds: Reverse stock split decisions are continuing in the Saudi market. After Anam, Al-Baha, and Shams, Mulan’s general assembly approved a split, while Dar Almarkabah and Keir International await their turn. The first four companies share the fact that they split their shares in 2023 and later consolidated them again, confirming that changing the nominal value does not create value in either direction.

It is worth noting that the minimum-price rule addresses the share price, while the regulatory indicator of capital adequacy remains the ratio of accumulated losses to capital—a ratio unaffected by a reverse split. This gap explains why the prices of the first three companies fell by 34% to 54% after the splits: the market prices financial position, not the number of shares.

The importance of sequencing is clear in the case of Darb Saudi Arabia, which wrote off its losses through a capital reduction before the reverse split, making it the only one among them without accumulated losses. A reverse split is therefore a technical step whose value comes when it forms part of a comprehensive capital restructuring plan.

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