How high does a stock have to raise in order to split?

Question

When it does split does that mean your shares double?

Answer 1

If it's a 2-for-1 split your shares double.

3-for-1 your shares triple, etc.

There is no height the stock price has to get to before this can happen.

.

Edit: Why thumbs down? There's nothing wrong with this answer. Maybe I should have said "number of shares double," but that's the way the question was phrased.

Also, It's not like I don't have the academic background...

Answer 2

you already have some good answers, however the idea that a company will reduce the price of a single share by half or a third is based on the concept that people have a standard - normal price per share of most stocks on the market - - - that set standard used to be around 20.00 per share to about 50.00 per share - each time (most) stockes entered the 50.00 or higher range they would split (twice the shares at half the value) this is simply a way of keeping shares at a standard price per share for entry into owning shares.  Many companies today have their entry price set higher - Google was near 500.00 per share for years - Apple at times up over 200.00 per share - but most are in the 20-100 range today.

a company that does lots of splits - usually signals that their value has been climbing sharply in recent years - (a growth company) - - - the common misconception for new investors is that somehow the value doubles in an instant - not the case!!!

hope that helps a little more.

and yes Berkshire Hathaway - sets the record - and never has split - hence the record price per share - Warren Buffet the owner /guru of his investments decided he only wanted those who could afford a high price (elitist/serious investors to get into his company) this is usually not beneficial to a companies stock purchasing concept - but he's pretty darn smart - and has his reasons.

regarding the company you are interested in - it's P/E is a bit high, however its earnings are good - I don't really know enough about it - but you can research it more on this site and many others

Answer 3

There is no pre-determined point at which a stock splits.  it is a decision made by the baord of directors and approved by the shareholders.  One company, Berkshire Hathaway (BRK.A) has never split, which is why each share, as of right now, is worth $133,199.99 (nope, not a typo)

There are two types of split, a reverse split, and a forward split.  Reverse split is lowering the number of shares that you have.  For example, you get 1 share for every 2 that you have (but each share is worth twice as much).

The forward split creates more shares that are worth less each (2 for every 1, but worth half as much).

-a little after the fact here...but why the "H" did someone vote down on my answer that is 100% accurate?-

Answer 4

There is no limit or threshold that a stock needs to reach in order to split.  The company makes that decision and can do it at any price.  

The company also selects on how they will split the stock, 2 for 1, 3 for 1 or even do a reverse splits but those are rare and usually not a good thing.

Answer 5

Scott K has the right answer.