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What is the difference between a squeeze out and a share consolidation?

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User Jameel
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Final answer:

A squeeze out is a process enabling majority shareholders to force minority shareholders to sell their shares for complete control, whereas share consolidation is a reduction in the number of shares to increase their individual value.

Step-by-step explanation:

Difference Between Squeeze Out and Share Consolidation

The difference between a squeeze out and share consolidation is that a squeeze out refers to the process by which majority shareholders can compel minority shareholders to sell their shares, often after a takeover, ensuring complete control of the company. On the other hand, share consolidation, also known as a reverse stock split, involves reducing the number of shares in circulation by combining a specified number of existing shares into fewer, proportionally more valuable shares. While a squeeze out is a method often used by new owners to achieve 100% ownership, share consolidation is used by a company to boost the perceived value of their stock or to meet stock exchange listing requirements.

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User Karim AG
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