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2007-06-28 01:44:26 · 6 answers · asked by ~*~*~*~*~*~*~*~ 6 in Business & Finance Investing

6 answers

the company will announce the split beforehand.

2007-06-28 01:48:28 · answer #1 · answered by kirbyguy44 3 · 0 0

1. I agree that stock splits mean nothing to an experienced investor.
2. Some companies split their stock when the price becomes "too high." The problem is that different companies have different feelings about what is too high. You can look at each companies historical stock price and see where they split before.

2007-06-28 08:57:59 · answer #2 · answered by hottotrot1_usa 7 · 0 0

Let us say that you purchased the stock of a company for $100 per share. Let us also assume that this company is doing well, and that within less than 5 years the stock price reaches $200 or more. This means that the company is growing at 20% or more per year, which is good. Let us also assume that the company has immense growth potential, like say, a manufacturing company in a low labour cost high quality country like India or China. Let us assume that this company needs a lot of funds to fuel its growth in the next 5 year period. The finance director of the company would like to access the equity markets with a second share issue. However, he realizes that the prevailing $200 per share is too high for the small investor to purchase. Therefore he decides to split each share into 2 shares of $100 each so that the shares can be purchased by even the small investor in the new share issue, like you did 5 years ago. Now the company goes ahead for its second share issue and gets over-subscribed because of its low price per share at $100 each, and of course, its high growth potential. In effect, a company which is doing well, needs more money, which hopes to continue doing well, and which is going to sell a second or a third round of shares to its investors would go for a stock split. Otherwise, it defies common sense for a company to go for a stock split.

2007-06-28 09:41:21 · answer #3 · answered by kalyan shasank 1 · 0 1

Stock split do indeed really mean nothing to the investor, other than owning more shares at a lower price. Also, more often than not, when they do split, the price will drop a little more than the announced split. But if your interested in just knowing, for other reasons, than you can check for upcoming splits at...

http://www.briefing.com/Investor/Public/Calendars/SplitsCalendar.htm
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2007-06-28 09:27:11 · answer #4 · answered by SWH 6 · 2 0

There are listings.... I trade every week & stock splits mean nothing. Absolutly nothing. Don't get caught up with an amatuer way of dealing with the market. You'll get burned.

2007-06-28 08:49:39 · answer #5 · answered by Common Sense 7 · 0 0

The company ANNOUNCES it a few weeks/months in advance. Otherwise you would have to be an insider to know that its gonna split.

2007-06-28 08:48:11 · answer #6 · answered by Troy Colts Rock 3 · 0 0

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