| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 408.1 | Marginal tendency: buy before, sell after | MCIS2::BONVALLAT | | Tue Mar 09 1993 13:27 | 7 |
| Well, my opinion is that it should be irrelevant and you should just
focus on the real reasons for buying or not buying stock in a company.
Assuming that you have already decided to buy and are just trying to time
the purchase however, I remember an academic study done about 15 years ago
which showed that stocks have a very slight tendency to increase in value
prior to the split and then to decrease after.
|
| 408.2 | I buy before splits, BUT ... | MSBCS::SHAH | | Tue Mar 09 1993 13:27 | 19 |
|
I also am interested in knowing this ...
A while ago I was in a similar situation, and I bought the stock before
the split (Buying a lower number of shares) that way reducing my
commission (since one of the factors for calculating commission was
Number of shares).
I have also noticed something else in past few months on couple of
stocks that I was watching. After the split, the stock value was more,
i.e., a stock at $137 split into 4 at $35 (=$140) ! Of course, this may
be a rare occassion. (But it happened in 4 cases !!)
Also, one of the reasons that I have heard on splits is that the
reason a stock splits is to make it more attractive for smaller
investors, meaning there will be more buying in tmes to come after the
split, making the price to go up ....
/Alkesh
|
| 408.3 | Walmarts stock split or not.... | WFOV11::CERVONE | | Wed Mar 10 1993 10:57 | 6 |
| Did Walmarts stock do a split, I have been following it and last week I
noticed that the price was in the $30's from a high of $65 a few days
earlier.
Thanks
Frank
|
| 408.4 | | MSBCS::SHAH | | Wed Mar 10 1993 11:12 | 2 |
|
YES. Walmart split couple of weeks ago.
|
| 408.5 | 2-for-1 Split | ODIXIE::ASHMEAD | | Fri Mar 12 1993 14:26 | 4 |
|
Walmart split 2-for-1 as of February 28.
|
| 408.6 | Possible tax benefit | CLARID::JENSEN | | Fri Apr 02 1993 02:47 | 18 |
| Depending on the tax code - you may benefit from a split. In some
countries you pay no capital gains tax if you have owned the stock
for more than say 3 years. Consider the following:
You buy 100 shares of stock X @$100 ---> $10000
They grow to $200 a share --- Value now = $20000
Now they split so you end up with 200 shares @$100.
If the tax code applies FIFO rules you can now sell the first
100 shares you bought for $100 a pop and pay no tax, as you made
no profit. The shares you got from the split you can sell after
the "no-tax" deadline (3-5 years depending on country).
Very popular year-end activity :)
/Soren
|
| 408.7 | | SAHQ::ROSENKRANZ | Rock with Gene & Eddy | Fri Apr 02 1993 08:07 | 3 |
| You'd better check with your tax advisor. As I understand the tax
laws, your suggestion is incorrect. Your basis on the post-split
shares is the same regardless of which shares you choose to sell.
|
| 408.8 | Not in US | KOALA::BOUCHARD | The enemy is wise | Fri Apr 02 1993 10:25 | 4 |
| re: .6
I don't know the rules in countries without taxes on long-term gains,
but the strategy in .6 is definitely not valid in the US!
|