Centaurus Diamond Tech. Inc. (fka CTDT)

[bizops12]

Ice - This may answer your question: Also when the company had 30 million shares in float I thought it might be prudent to split just to add some liquidity to the market. Now that there are 135 million I am not so inclined. Depending on whether or not there are trading restrictions on the 60,000 issued to funders. If they are not selling then we may still have a scarcity issue on the stock which can artificially drive the price up or hamper PPS growth because pps is inflated for the same reason. This is something the company will need to look at fairly soon I think.



"All publicly-traded companies have a set number of shares that are outstanding on the stock market. A stock split is a decision by the company's board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders. For example, in a 2-for-1 stock split, every shareholder with one stock is given an additional share. So, if a company had 10 million shares outstanding before the split, it will have 20 million shares outstanding after a 2-for-1 split.

A stock's price is also affected by a stock split. After a split, the stock price will be reduced since the number of shares outstanding has increased. In the example of a 2-for-1 split, the share price will be halved. Thus, although the number of outstanding shares and the stock price change, the market capitalization remains constant.

A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.

A stock split can also result in a stock price increase following the decrease immediately after the split. Since many small investors think the stock is now more affordable and buy the stock, they end up boosting demand and drive up prices. Another reason for the price increase is that a stock split provides a signal to the market that the company's share price has been increasing and people assume this growth will continue in the future, and again, lift demand and prices."



Read more: What is a stock split? Why do stocks split? http://www.investopedia.com/ask/answers/113.asp#ixzz3tjrZQuMo
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