Peer Review

How did the reverse stock split of Movie Pass’s parent company affect its total stockholders’ equity?

Material Detail page

Reviewed:: Jan 15, 2021 by Business

Bookmark

Ratings

Overall Rating:

Content Quality:

Effectiveness:

Ease of Use:

Overview:

This is a case study in which students can apply their understanding of accounting for stocks to a situation involving a real-world company’s reverse stock split. Students apply accounting principles to the valuation of stock at par value before and after the reverse stock split. They will discuss the decision of the company to discontinue its NASDAQ listing and determine why the company chose that alternative. Students will learn to identify stock prices to determine when a stock split has occurred. Students will determine the effect of the reverse stock split on total Stockholder’s Equity.

Type of Material:

Case Study

Recommended Uses:

In-class
Homework
Team
Assessment

Technical Requirements:

Edge, Chrome

Identify Major Learning Goals:

Explain how to account for stock splits.
Determine how a reverse stock split affects a stock par value.
Evaluate the company’s decision to remove its listing from NASDAQ.
Identify the difference in the market price of the stock before and after the reverse stock split.
Determine how a reverse stock split affects Stockholders’ Equity.
Learn about the impact of a stock split on a company’s shares and stockholders’ equity using a realistic case scenario.

Target Student Population:

Business, Accounting, Finance Undergraduate

Prerequisite Knowledge or Skills:

Knowledge of basic stockholder’s equity accounting terms and introductory accounting or finance would be helpful but not required.

Content Quality

Rating:

Strengths:

Current and relevant case topic pulled from recent headlines impacting a company that students are likely to identify with
Short case study format is clear and concise and can be used in many learning situations
Instructor’s material contains the Microsoft Word file and a PDF for use with students and a Microsoft PowerPoint to display the contents visually during a classroom session.
The material is well-grounded in the discipline of accounting for corporate stock.
The link to the website is also available for online deployment, as desired.

Concerns:

Links to the case blog post and questions are provided, but no other material is contained on the website, and no solutions are provided for the instructor
Material does not demonstrate a core concept as a stand-alone case, but rather is meant to be used alongside an introductory textbook in accounting or finance to provide context, summarize concepts and demonstrate the accounting theory related to a stock split

Potential Effectiveness as a Teaching Tool

Rating:

Strengths:

Material would be easy to integrate into curriculum assignments in introductory accounting or finance
Flexible format can be used in-class for assigned as individual or team case
The questions could be used to measure student learning outcomes, however, the solutions are not provided, so the instructor would need to develop a grading/assessment method for the case
This material reinforces the concepts of stocks and stock splits in an accounting context throughout the case study.
It is a self-contained piece that could be used flexibly in terms of course delivery.
It is very efficient and relevant to contemporary accounting practice.

Concerns:

No learning objectives are provided
The learning material does not identify prerequisite knowledge
The material does not demonstrate relationships between the various accounting concepts presented

Ease of Use for Both Students and Faculty

Rating:

Strengths:

Interesting and engaging case with the questions clearly laid out
Meets accessibility requirements for any students with a modern web browser
very easy to use and is presented in multiple formats to promote accessibility.
It is professionally developed and visually appealing.
Since the files can be downloaded, the case study can be delivered without the Internet.
The quality of this learning material is very high.

Concerns:

Very basic layout is not visually appealing or interactive, just short blog post with list of questions

Other Issues and Comments:: Recommended as a student assignment alongside an introductory accounting or finance textbook, to provide context and the theory behind the mechanics of a stock split.
Creative Commons: