A stock split is when a company decides to lower the price of its stock and increase the number of outstanding shares. In the case of a 2-for-1 stock split, for example, the number of outstanding shares would double and the share price would be cut in half. So, a company that had 1 million shares trading at $50 each prior to a split would have 2 million shares trading at $25 each after a split. But a split can be 3-for-1, 4-for-1 or any other ratio.No.
that it will split its stock 10-for-one is unusual because the stock had fallen more than 60 per cent prior to the news.In days before discount brokerages and online trading, stock splits made sense. That’s because investors were often limited to buying stocks in so-called board lots, or trades in increments of 100 shares. If a stock traded at a high nominal price, small investors might not be able to participate.
Why does a 20-for-1 stock split – recently announced by Amazon and Google-parent Alphabet -- get so much attention?shares traded at about US$3,200 in early April. After the split, that would translate to US$160. Some analysts believe that the moves by these two technology heavyweights could influence a resurgence in stock splits., the company run by the legendary investor Warren Buffett.
traded at a high of US$544,000 in late March . Mr. Buffett has long argued that having an expensive stock encouraged investors to remain with the company long-term and discouraged short-term traders. It also makes it easier to measure the stock’s progress from just US$7.50 in 1962. Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter.
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