4 ms·
Theoretically a stock split doesn’t change anything - let’s say you used to have 100 shares valued at 10 dollars each, and the company decides to change that to
by czzr 5y ago
Theoretically a stock split doesn’t change anything - let’s say you used to have 100 shares valued at 10 dollars each, and the company decides to change that to 200 shares at 5 dollars. You still have the same amount of value (1000 dollars).
So why do it? Usual reason is to make trading a bit easier - now you can sell 1 share at 5 dollars, rather than having to sell 1 share for 10, which might make it easier to find a buyer.
- imwillofficial 5y agoIn the past has this been a net gain? Got RSUs vesting this year and trying to decide to sell or keep.
- floatinglotus 5y agoIf you work for the company you should keep your shares and vest as much as possible. The split has no impact on you in reality. If you work there you are in for the long haul and you’re going to do well given the current trajectory.
- deleted 5y ago[deleted]
- geraldwhen 5y agohttps://en.m.wikipedia.org/wiki/Endowment_effect https://en.m.wikipedia.org/wiki/Endowment_effect Given the cash, would you buy the stock outright? If not, sell.
- gowld 5y agoReal numbers are much more intuitive -- It's easier to find a buyer for $500 for 1 share than $3000 for one share. (And extremely low prices are subject to non-trivial rounding error in per-share prices) That's why companies try to keep their stock between $10 and $500, using splits or reverse splits.