Replies to post #19486 on Sirius XM Holdings Inc (SIRI)

[UpstateChris]

When stocks complete a rs the price rises and the shareholders end up with less shares, as if you didn't know that. lol

Yes and no. If a stock is $1 and you have 1,000 shares and there is a 10:1 reverse split you would have 100 shares at $10 each - same amount of money - for that split second.

There are two issues:

1) R/S's have a bad connotation. Investors look at them negatively so when they are announced there is usually a drop in price.

2) After the R/S your profits grow slower. A 1.00 stock climbing to say 1.14 (14% profit) is not that difficult. After a split the $10 stock would have to go to $11.40 for the same profit - and that is not usually as easy. The greater the ratio of the R/S, the more this is true.