2007-02-12 03:44:46 · 7 answers · asked by Queenie 1 in Business & Finance ➔ Investing
Not much! and that's a fact.
2007-02-12 03:47:13 · answer #1 · answered by Sugar 7 · 0⤊ 0⤋
Stock splits by themselves do not affect your investment at all.
For example if you have 1 share of a stock at $100 and it splits 2:1 then you end up with 2 shares worth $50 each. Either way you still have $100.
That being said, splits normally indicate to the investment community that the management expects the shares to rise further and thats why they are spliting the stock to keep the per share price down. Therefore it becomes a SIGNAL to investors that management is optimistic about the future. So in the short run you will often see a stock rise momentarily after a split, but in the long-run it has NO IMPACT.
If you don't believe me look at Birkshire Hathaway. Warren Buffett, the greatest investor of our time, realizes that stock splits are meaningless and therefore doesn't believe in doing them. As a result his stock has had no appearant negative impact. People have tried to argue that the split keeps the share price down and therefore keeps the shares affordable to more investors and therefore increasing the DEMAND (price) for the stock. BRKA has prooven that theory WRONG! Look at the Link! Because individual investors have practically NO impact on the market. Its the institutions who do and they can afford ANY price warranted.
http://finance.yahoo.com/q/bc?s=BRK-A&t=my
I suspect the GOOGLE boys will do the same as Warren and never split their stock either.
2007-02-12 04:32:51 · answer #2 · answered by random_market_investor 2 · 0⤊ 0⤋
Call it compound interest because it gets interesting how an investment compounds. I've had that happen with Phillips Petroleum stock, ConocoPhillips (COP) today. Really nice when it happens, but it doesn't always happen that the stock after the split rises to or beyond the before-split value.
2007-02-12 04:11:30 · answer #3 · answered by Rabbit 7 · 0⤊ 0⤋
it will only split once in the short term, but the ratio could change. There is usually a short term bounce but probably not more than 1%.
2007-02-12 04:13:10 · answer #4 · answered by Anonymous · 0⤊ 0⤋
When the stock splits it makes the per share price lower and more people buy it which drives up the sales. You are bound to make money.
2007-02-12 03:47:45 · answer #5 · answered by Penelope Yelsopee 3 · 0⤊ 2⤋
no not really you might make a dollar or lose a dollar
2007-02-12 03:53:03 · answer #6 · answered by andy 2 · 0⤊ 0⤋
No.
2007-02-12 04:18:21 · answer #7 · answered by Anonymous · 0⤊ 1⤋