3 MINUTE TAKE: What’s A Stock Split?
When a company divides its shares to lower the price and increase the overall amount of shares available. A company usually undergoes a stock split when the price of its shares has gotten very high!
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Stock splits can be 2-1 or 4-1 and even 7-1! So, if the stock price was $1,000 per share, a 2-1 stock split would cut the price in half, to $500 per share. 4-1 would be $250 per share. 7-1 would be approximately $143 per share.
Why Should I Care About Stock Splits??:
- Level The Playing Field:
A stock split is a great equaliser as a wider range of investors can access a profitable company now that the price point of a share is considerably reduced.
- Real Life Example: Apple Inc
- Apple’s stock price was US$500 per share before a 4-1 stock split in August 2020, which reduced the cost per share to US$125.
- This 4-1 stock split gave a wider range of investors access to the profitability of this renowned company.
- Can I Invest In Apple, Inc?
- FSL clients have the option of investing in the US stock market – inclusive of Apple Inc – and other high-performing multinational companies.
- Our clients welcome the advantage of expanding their investment portfolio outside of the local and regional markets.
What Does A ‘Stock Split’ Look Like?
A Local Example: MASSY HOLDINGS
- Massy Holdings has announced a stock split of 20-1! The stock was previously priced at $109TTD. This 20-1 will reduce the price to ~$5.46 TTD
- The number of shares in issue will multiply from 99 million to 1.99 billion units!
Why Would A Company Do A Stock Split?
A Local Example: MASSY HOLDINGS
- As with Apple, Inc, a stock split gives more investors access to Massy Holdings
- Stock splits also have the potential to make Massy’s stock more liquid and easier to trade, thereby making it more attractive and potentially driving up the price.
How Can I Take Advantage Of A Stock Split??
- Is The Risk Worth It?:
- Stock splits are great opportunities to expand your portfolio, however, risk is still a major factor that must never be ignored when investing.
- No stock is a 100% sure thing. So a lower stock price is not a guarantee that investing in Massy or Apple is a great fit for your investment goals.
- How To Know If A Stock Split Is Good For You:
- It’s best to talk to your financial advisor about your wishes and concerns.
- At Firstline Securities, we create wealth for our clients. Our investment solutions are tailored per client, because we know everyone isn’t investing just for retirement.
- At FSL, we understand that our clients are nuances with genuine and unique financial goals. This is why an investor’s decision to invest should depend on whether it aligns with their investment goals.
- An open conversation with your investment advisor should determine whether you should participate in Massy Holdings’ or even Google’s upcoming stock split. It’s worth looking into.
- Talk to your advisor today about any upcoming stock splits.
Three Minute Take. At FSL, we create wealth. Become a client to create a tailored investment portfolio that suits you and your loved ones well. Contact us today!
Hi could I get some more info please