Replies to post #3821 on IMD Companies Inc (ICBU)

[Ikimota]

I think a lot of us see it that same way.

[RustedBucket]

Well in your example it's pretty much a wash, but that assumes you buy at the exact price the stock splits at. What if you're down 50% because typically when a r/s happen rarely are people in at 0 or +% most are always a - percentage.

Look at this example, depicts what usually happens in a r/s reflective of the current pps of ICBU. Shareholder never wins in a r/s.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=55292725

[cintrix]

RS splits rarely turn out well. Especially when they are at high ratios which are done to lower the outstanding at the expense of existing shareholders. The only time a rs really can help is when it is a small ratio and it is done for example to stay at a certain pps to remain on a higher exchange.

[TeraDyne]

R/S 101:

R/Ses are bad because the A/S stays the same and does not get reduced with the O/S. You now own a much smaller percentage of the A/S, giving the company much more room to dilute. Even if they aren't going to dilute, everyone expects them to dilute and sells.