Stock Splits and Consolidations

Hi All,

I am wondering if I can get your opinions on both Stock Splits and Stock consolidations.

I know Warren Buffet does not believe in 'diluting' a stock by splitting it, whil today I received a proxy form where the company wants to perform a 10 to 1 consolidation.

What are the benefits or downsides to each of these?

Brett

brettc4 said:

Hi All,

I am wondering if I can get your opinions on both Stock Splits and Stock consolidations.

I know Warren Buffet does not believe in 'diluting' a stock by splitting it, whil today I received a proxy form where the company wants to perform a 10 to 1 consolidation.

What are the benefits or downsides to each of these?

Brett

Click to expand...

well with respect to FMG - Fortescue, it was once $130 (pre-share split price)

once they split it 10 for 1 it became psychological

people would be more willing to pay $3.20 (current price) than $32.00 where they would probably b more inclined to buy the likes of BHP


have a look at Incitec, that was 127 odd, now its $4, i know i would be able to purchase more IPLs at $4 than at $127