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Thanks, I got it. More cash for the company, and same net worth for shareholders (even more worth if you take taxes into account). So this would lead to an exp
by plopilop 10y ago
Thanks, I got it. More cash for the company, and same net worth for shareholders (even more worth if you take taxes into account).
So this would lead to an exponential growth to the number of shares? It really looks like a geometric progression. And, at the end, a huge amount of shares, each worth nothing.
- andrewaylett 10y agoI imagine the hope is that the company keeps growing, so the share price will rise that way. Also, the company can buy-back shares to keep the number in circulation lower and to increase the stock price, or it can consolidate its shares by merging them, so each shareholder receives one new share for each two old shares. Lastly, if you're looking at stock charts, the data provider will usually adjust historical values to take into account dividends and splits, giving you an accurate view of what the price would have looked like if the number of shares issued had never changed.
- plopilop 10y agoI see. Thanks for the reply!