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I try to understand stock split for yhoo on may 7 2007. It was 2:1 and the price of share stayed the same and went up...

Shouldn't the stock price be half of what it was when it splits? What am I missing

2007-07-31 04:57:43 · 5 answers · asked by mr curious 2 in Business & Finance Investing

5 answers

You are right. That is the principal behind a stock split. It depends on which service you are looking at the historical stock price. Most services will "split adjust" the price to reconcile the price movements. This means they go back historically and adjust the price for you as if the same number of shares were always outstanding (post-split), but they usually footnote that somewhere. You would have to check to see what unadjusted prices were like.

2007-07-31 05:12:37 · answer #1 · answered by PK 5 · 0 0

As far as I know, YHOO has not split since May 2004. Where did you see that it split this year? Even Yahoo's own stock data doesn't show a split this year.

Your thinking is correct that with a 2 for 1 split, the price would be cut in half (making the total value of your shares the same). In this case, I think what you're missing is that there wasn't a 2 for 1 split on that date.

2007-07-31 12:12:46 · answer #2 · answered by Dave W 6 · 0 0

The actual price did drop in half (are you referring to the May 12, 2004 split?). The graphs on Yahoo finance shows split and dividend-adjusted values.

2007-07-31 12:15:59 · answer #3 · answered by N E 7 · 0 0

What you are seeing is just a function of the graph, it has been backward adjusted to smooth out the bump. The answer to your question is yes when you double shares you halve value per share.

2007-07-31 12:10:12 · answer #4 · answered by jimmymae2000 7 · 0 0

It could have been a reverse split, where you get fewer shares but they are worth more.

2007-07-31 12:01:30 · answer #5 · answered by Anonymous · 0 0

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