Share price halved...it appears.

D

danpaddyandy

Guest
Hi folks,
Under what circumstances would the share price of a company be reduced to half in the space of one working day,and the yearly high and the yearly low also approximatley halved.I dont believe the bottom has fallen out of this company as there are no reports of same on any news bulletins.websites etc.Would this be known as share splitting and if so why is it done?what are the advantages?
Kind regards,
DPA
 
Are you sure that you're not looking at the price of ADRs/ADSs on NASDAQ that might represent some fraction or multiple of underlying shares on other exchanges (e.g. ISE, LSE) and comparing apples with oranges?
 
danpaddyandy said:
Hi folks,
Under what circumstances would the share price of a company be reduced to half in the space of one working day,and the yearly high and the yearly low also approximatley halved.I dont believe the bottom has fallen out of this company as there are no reports of same on any news bulletins.websites etc.Would this be known as share splitting and if so why is it done?what are the advantages?
Kind regards,
DPA
Click to expand...

We know what you're referring to.
There was a 2 for 1 stock split in a very prominent Irish company today. Anyone with one share worth X now has 2 shares worth X/2.
The reason this has happened is that this company's famously belligerent and confrontational chief executive believes investors avoid shares worth more than €10.
 
Hi ClubMan...I observed the share price on aertel (which is possibly not the best place to view prices as it is sometimes inaccurate),goodbody and www.ise.ie to name a few. but KalEl's explanation seems to answer my query.
This chief executive you speak of...I would'nt fancy working for him myself but the share price over the last 12 months says a lot.
 
KalEl said:
The reason this has happened is that this company's famously belligerent and confrontational chief executive believes investors avoid shares worth more than €10.
Click to expand...

Tell that to Berkshire Hathaway class A shareholders :)

But shares post-split often do attract a lot of interest.
 
It is obiviously not illegal to do this share splitting thing..but do companies that do this have to give notice that they are doing it and why dont more companies do it if its going to encourage investment.A few companies on the ISE are trading at 30 euro plus at the moment
 
danpaddyandy said:
It is obiviously not illegal to do this share splitting thing..but do companies that do this have to give notice that they are doing it and why dont more companies do it if its going to encourage investment.A few companies on the ISE are trading at 30 euro plus at the moment
Click to expand...

Eh, why would it be illegal?
Personally an actual numerics of a share price wouldn't influence me but I can understand how €10 could be perceived as a threshold for some people. Whether the benefits of such an action outweigh the expense or such benefits are even measurable is open to debate.
 
Thanks everyone for your replies.As you probably guessed i'm a bit of a novice...but i'm learning!!
 
This also keep the proportion of assets per share in line as assets increase, a financial ratio some analysts use
 
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