Conference nyoss1::market_investing

    Several (of many, I'm sure) reasons a company would split their stock is to
    -make the stock more affordable to investors
    -psychologically lower the down-side risk of loss. A $100 per share
     stock can fall a lot more than a $50 or $25 per share stock.
    -And when a stock is too high priced, usually only big traders and
    	investment institutions can buy them, thus not allowing the little
         guy to invest. This will allow a few big investors to 'control'
         the company when it comes to stockholders meetings and votings.

    
    	From what I understand it is more psychological than anything else.
    People would rather pay $20/share than $100/share for instance.  Therefore
    when a company sees it share price gets too high it splits it to make
    it more attractive to investors.  It does not increase/decrease the
    value to the existing investors by doing this since it is still worth
    the same. 

RE: .2

Unless you are Warren Buffet whose Berkshire Hathaway(?) stock is currently
selling for $8750 a share.  But heh, when you make money grow like he does,
you are much less of a slave to the market :-)

Lee G.

    
    
      It's kind of like "Bingo"  where you can split and play 2 cards
    at once...  :^)
    
    
    						-al
    

    Oh, Berkshire's fallen on hard time have they? I think there was a
    period when their per share price was in the mid-five-figures!

    ---

    Stock "splits" go in both directions of course. When your corporate
    stock gets down with the rabble in the single digit price range, you
    might want to do a 2 for 5 "reverse split" to raise the per share price
    and make your stock holders think they've got a better issue. Snob
    appeal you know - to H___ with earnings or anything so pedestrian!
    

The "more affordable" argument only makes sense if you assume that lots of
small investors don't want to deal in odd lots.  Otherwise, what's the
advantage of 100 shares at $20 over 20 shares at $100?

.6> small investors don't want to deal in odd lots.  Otherwise, what's the
>   advantage of 100 shares at $20 over 20 shares at $100?

Broker commissions are generally much higher for odd lots.

I'll agree with several previous, that the effect of these splits are mostly
psychological.

Commissions on odd lots are higher, but *much* higher?  I don't think the
difference is enough to account for the price increase that usually
accompanies a stock split.

    In addition the broker often shaves a 1/4 or 1/2 point (documented so it is
    not a scam) over the actual price if you trade an odd lot. Read the
    fine print.
    
    Dave

Of course, we're talking about high-priced stocks, so the point differential
doesn't amount to a lot.

    A "point" of Berkshire is, I believe, $50.  There are no reported "1/4"
    points of BH.
    
    Also, a round lot of Berkshire is 10 shares.  I made a nice uptick from
    it last January (91) with 2 shares.