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Total Valuation / Total Earnings. Increasing the shares will not change the math... Think about it in your head with an imaginary company with 1, 2 or 4 share
by TomatoTomato 14y ago
Total Valuation / Total Earnings. Increasing the shares will not change the math...
Think about it in your head with an imaginary company with 1, 2 or 4 shares.
- ceejayoz 14y agoI've always been baffled by stock splits (and those calling for them) for this very reason. I suppose it makes sense for BRK.A's $120k shares, but for AAPL?
- TomatoTomato 14y agoStock splits are an interesting discussion. Other than psychological differences, a split really only increase liquidity and encourage more small investors but it also encourages more short term speculation. Berkshire is happy to continue to cater to the highest class of long term investors with the added benefit of being noted as the highest priced stock in the NYSE. Although, they did recently do a large split of their class B stock to allow more trading and to be included in the S&P 500.
- Drbble 14y agoGoogle is doing a stock split to create new nonvoting shares.