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As someone who's very un-knowledgeable about the stock market - is there something special about the $1 mark? Isn't it arbitrary how the total market value of t
by apetresc 8y ago
As someone who's very un-knowledgeable about the stock market - is there something special about the $1 mark? Isn't it arbitrary how the total market value of the company is divided into individual shares?
- wgerard 8y agoYou'll get delisted from the NYSE if you fall below $1/share or below a certain market cap for more than 30 consecutive trading days. Being delisted is generally a very bad sign, and it becomes much harder for shares to get traded.
- planteen 8y agoThis is correct. To add to this, you will sometimes see companies attempt to avoid delisting by reverse stock splits (e.g., 10 old shares become 1 new share).
- thinkpad20 8y agoNot a stock market expert by any means, but human psychology has a major impact here. That’s why stocks tend to find floors/ceilings at nice round numbers like multiples of ten or whatever. Likewise to a machine a number is a number but to a human who’s evaluating the stock, seeing something less than $1 is a red flag. Someone please correct me if I’m off!
- planteen 8y agoThe primary reason is $1 is the delisting threshold.
- vincentmarle 8y agoYou can only bid up to a cent difference. So if every new bid changes the entire valuation of your company by at least 1% then it becomes very volatile.
- evanpw 8y agoThe tick size for stocks less than $1 is $0.0001.