Stocks don't split as much as they use to (broker, trading, cash)
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I have been a long time follower of the stock market. It seems when a stock hit a certain price and held steady the stock would split. That is not the case anymore. Do companies think the stock price will go up after a split? What are your thoughts?
I have been a long time follower of the stock market. It seems when a stock hit a certain price and held steady the stock would split. That is not the case anymore. Do companies think the stock price will go up after a split? What are your thoughts?
This could be complete nonsense, but I wonder what impact inflation has on stock prices.
20 years ago a $100/share stock seemed expensive to your non-institutional investor, now it needs to be closer to $500-600 to get that same reaction.
I have been a long time follower of the stock market. It seems when a stock hit a certain price and held steady the stock would split. That is not the case anymore. Do companies think the stock price will go up after a split? What are your thoughts?
stock buy backs have done better then splits the last 15 years
Years ago you had to use an expensive broker for trades and trades under 100 shares (odd lots) cost more per share in fees than 100 lot shares. Thus you wanted to buy in 100 share lots. Thus stocks split to make it possible for more people to buy 100 share lots. Now trading is cheap and no need to buy in 100 share lots.
Some states tax corporations on the issued or outstanding shares of stock so splitting could increase taxes.
And allow for more control of the company as well...
more for tax reasons than control...
Say for instance Apple, if they split, they have to pay taxes on the split. They already don't want to re-patriot their cash so why would they split stocks and thus have to pay taxes on it?
Before companies didn't have so much off shore cash so when they split, the money is already "patrioted", so they don't have to pay additional tax to bring it back. Now they have to pay tax to bring money back to US just to pay off the tax from the split
besides, when they can make different classes of stock, why would they split just to lower price again? Like berkshire stock, their A class is expensive but instead of splitting it, they just make a cheaper B class
I have been a long time follower of the stock market. It seems when a stock hit a certain price and held steady the stock would split. That is not the case anymore. Do companies think the stock price will go up after a split? What are your thoughts?
They definitely don't split as much as they "use to"; although they may or may not split as much as they used to.
Say for instance Apple, if they split, they have to pay taxes on the split. They already don't want to re-patriot their cash so why would they split stocks and thus have to pay taxes on it?
Before companies didn't have so much off shore cash so when they split, the money is already "patrioted", so they don't have to pay additional tax to bring it back. Now they have to pay tax to bring money back to US just to pay off the tax from the split
besides, when they can make different classes of stock, why would they split just to lower price again? Like berkshire stock, their A class is expensive but instead of splitting it, they just make a cheaper B class
Apple did do a stock split though 10 for 1 a couple years ago
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