Augen said:
sethnintendo said:
I am not a smart investor nor have I ever invested. However, I wanted to know why Apple or Google has never done a split recently. Don't you usually split the stock once it gets past 100 or 200+ level let along 400-600 range. What are the benefits of splitting stock and what are the downfalls? It seems like these stocks should be split. The only stock that I know that doesn't split is Berkshire Hathaway.
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Stock splits are at the discretion of the company so they never have to (as you point to the most famous stock that does not). They split often because it makes them affordable to more investors sometimes driving the price up because of the illusion of affordability. So, why may you not want that? Well, perhaps Google and Apple don't want smaller investors to possibily create more voalitility as they are content with their current place. These are stocks that have shot up past few years and tech stocks have the potential to be voalitile as is so they could be suring up value with long term investors . They could either or both split in next few years, but I would not bet on it,
Bear in mind, neither is "wrong", just different philosophies of managing stock value.
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I just remember keeping track of Microsoft during the 90s when I was young and seeing it split all the time. If you were an initial investor in Microsoft you would probably be sitting on a lot of shares right now and have a very good return. I am not even sure where it is sitting at right now but if it can survive the anti trust suits with only a small devaluation of its stock then it is golden. I might not like Microsoft but it knows how to make money.
