Stock Splits
A stock
split occurs when a company chooses to split their stock, in essence, giving
you 2 shares for every 1 share you currently have, and each share is now worth
half of what the previous shares were valued at individually. While it stands to reason that a stock that
splits is worth exactly the same thing upon splitting, there is cause for
celebration when this occurs.
Lower price
means more can buy
Google’s share price now. It’s currently
at $410 per share. A person wanting to
invest $1000 or less might think twice about buying share in this expensive
stock. However, were the stock to split,
more people might consider buying in at $205 a share.
often take the same route
But, maybe
more importantly, history shows that a "good company" will generally
retrace back to its pre split price within about 12 to 18 months, with some
doing it as soon as just 3 or 4 months. Think about the stunning pattern of
splitting and running up, splitting and running up that great companies have
done.
hoping your stock splits soon!