3 ms·
My naive layman question would be, what does that actually mean? Couldn't they just issue fewer shares and get a higher price for each one?
by mbg721 4y ago
My naive layman question would be, what does that actually mean? Couldn't they just issue fewer shares and get a higher price for each one?
- benj111 4y agoYes. if you have 100,000 shares in circulation at $10 each you have a market cap of $1,000,000. the same as if you had 10 x $100,000 shares, or 1,000,000 x $1 shares. but why the rule? theres no reason why my $1 share can't rise 0.1% just like the $10 share. they don't hand me a 1/10th penny coin. so why arbitrarily decide that stocks below $x are bad? yes a 1c movement is proportionately more, but if youre saying that humans are so obviously psychologically anchored by such round numbers, then the least of humanities problems, and finances, and capitalisms, is the price of a share.
- deleted 4y ago[deleted]