When company recommend split stocks..?

Question

When would we expect split of company shares?

Answer 1

When the price of the stock is too high.  If the price of each stock reach, for example, $200 a share, few people would be able to transact it with the standard 100 share block (you would need $20,000 + fees!).  The market of that particular stock at this time would be "thining", as only the wealthiest would transact it.  This lack of liquidity is not desirable, and markets may not accept the stock if it does not move frequently on the floor.

To provide better liquidity, the stock is split.  The total value on the hand of the investors is unchanged.  What is changed is the amount of shares and, more importantly, the price per share.

Answer 2

Because there are a number of finance-related laws (red tape) that need to be followed, it will probably take at least a month.

Your company's website should have more information.

Answer 3

The most important thing about stock splits is..... they mean nothing.

Only armatures are really interested in them.