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Re: zipjet post# 1858

Saturday, 10/13/2007 1:01:11 AM

Saturday, October 13, 2007 1:01:11 AM

Post# of 8473
Conditions are different now wrt splits.

When I was a kid, you had to trade in 100s blocks or pay a huge commission. Therfore when stock prices went over $100 or so it put it out of reach of many common investors.

This is largly gone now (except with Berkshire Hathway class A shares), but some people still think that some stocks are "too expensive" based on share price alone.

Yes, stock splits today should have 0 effect, but they still do have some for irrational reasons.

On the other hand, liquidity issues are quite real. If a company trades $100k of shares a day, I certainly don't want to be $30k worth knowing I couldn't get in/out without a market penalty. But this issue is not effected by splits.



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