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You're right about that number being so obviously easy to game, but share price isn't completely irrelevant since many mutual funds won't hold shares with a pri
by mcphilip 15y ago
You're right about that number being so obviously easy to game, but share price isn't completely irrelevant since many mutual funds won't hold shares with a price < $5 [1]. Also, share prices < $1 can lead to delisting from exchanges such as NYSE or Nasdaq [2]
[1]http://www.cfo.com/article.cfm/3011203?f=related http://www.cfo.com/article.cfm/3011203?f=related
[2]http://www.usatoday.com/money/perfi/columnist/krantz/2009-01-12-delisting-stocks_N.htm http://www.usatoday.com/money/perfi/columnist/krantz/2009-01...
- lsc 15y agoright, but a company that is worth something is going to do a reverse split when it starts trading in the $5-$10/share range. Share price is technical arcana, something the accountants should worry about. Personally, I'd compare letting the stock price fall below $5 to filing your required government regulation paperwork late. If it happens often, there is something wrong, sure, but it's something that can be fixed by firing a couple of paper pushers; it doesn't indicate a fundamental weakness in the company's business.