Splitting shares does not make them more dynamic
What you are saying podg is that people who are reluctant to buy or sell 5,000 shares at $0.88 would be happy if there could buy or sell 10,000 for $0.44 even though the dollar amount ($4,400) is the same.
I regard that as unlikely.
Best Wishes
Paper Tiger
Written to the tick, tick, tick of cooling CPU's
Quote:
Originally Posted by
podg
...I wouldn't be at all surprised if the same would happen to CDI, given it's medium-term prospects...
and there we have it, the admission of belief that an increase in liquidity is not related to share-splits but to other factors including the actual performance of the company.
Whilst there are papers that show a benefit from share-splits there are also papers which show there are no benefits and then there are papers that show that both the previous two sets of papers were flawed in their assumptions.
I have reliable data for a few stock splits. [My data sources used to automatically adjust for reconstructs, but the past few years I have been gathering raw data] and all I can say is that within the bounds of statistical probability there is no liquidity benefit to a share-split.
I also have data for hundreds of share consolidations, often failed companies with 10+ to 1 ratios and an associated reverse takeover or other significant event to muddy the waters.
Best Wishes
Paper Tiger