Investing

anyone experience a stock split before and can you tell me your experiences?

  • Last Updated:
  • Apr 5th, 2018 1:35 am
[OP]
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Jan 27, 2004
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T.O. Lotto Captain

anyone experience a stock split before and can you tell me your experiences?

http://business.financialpost.com/news/ ... tock-split

I have a bunch of these
DOL
I'm pretty happy with it. It has given me good capital gains. Small dividend... But Dollarama kind of blew up. Plus I believe them to be a very competitive and sound company with large market share... and pretty much top of the dollar store game in Canada.

I only know of stock split from my old IFIC course, and readings. NEver actually had one of my stocks split...
What happens in a stock split that makes the value go up? And usually how much does it go up by?
8 replies
Deal Addict
Dec 3, 2014
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Ontario
The stock doesn’t necessarily go up. The theory is a high stock price deters investors so they do a split.

For example, Apple split some years back and a $500 stock was suddenly $70. But now you have more Apple shares in your account.

That’s it. The rest is up to the market.
[OP]
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Jan 27, 2004
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llpresident wrote:
Apr 2nd, 2018 10:29 am
The stock doesn’t necessarily go up. The theory is a high stock price deters investors so they do a split.

For example, Apple split some years back and a $500 stock was suddenly $70. But now you have more Apple shares in your account.

That’s it. The rest is up to the market.
ahh okie.
That correlates when I dug a little deeper.
When a stock splits, it can also result in a share price increase following a decrease immediately after the split. Since many small investors think the stock is now more affordable and buy the stock, they end up boosting demand and drive up prices. Another reason for the price increase is that a stock split provides a signal to the market that the company's share price has been increasing and people assume this growth will continue in the future, and again, lift demand and prices.

Read more: What is a stock split? Why do stocks split? https://www.investopedia.com/ask/answer ... z5BWdyuJRx
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Darn. I was really hoping for my trusty old dollarama to blow up again . :lol:
Deal Addict
Feb 4, 2015
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Canada, Eh!!
Stock split adds no value.

10 shares @ $100 same as 100 shares @ $10.

Rationale usually that more liquidity added for smaller investors so there is usually is a small uptick but will not result in any long term gain.

Berkshire never split and only reason for B shares was because another company was going to do similar... B shares I believe do not have same rights as A shares.
Deal Addict
Dec 11, 2007
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Markham
One benefit of a stock split is the ability for DRIP to buy full shares. Its especially beneficial if you are with a brokerage that doesnt do partial share DRIPs, and would pay the fractional amounts in cash. The total dividend received usually doesnt change before or after a split, but because share price went from $200 to $50, now the $150 dividend can buy 3 shares instead of 0 + $150 cash.


Unrelated, but
But Dollarama kind of blew up.
usually means it tanked, which i think is the opposite of what you intend it to mean.
[OP]
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Jan 27, 2004
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Cerenity wrote:
Apr 2nd, 2018 10:42 am
One benefit of a stock split is the ability for DRIP to buy full shares. Its especially beneficial if you are with a brokerage that doesnt do partial share DRIPs, and would pay the fractional amounts in cash. The total dividend received usually doesnt change before or after a split, but because share price went from $200 to $50, now the $150 dividend can buy 3 shares instead of 0 + $150 cash.


Unrelated, but

usually means it tanked, which i think is the opposite of what you intend it to mean.
You're right. I'll save that language for the street.
just kidding...
Member
Feb 29, 2008
239 posts
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GTA
penny stocks will sometimes reverse split just so they can keep their listing at the exchange. Generally means they are on their way out
Sr. Member
Mar 17, 2016
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I hold DOL as well. Did you see how the price jumped around on the last earnings day? Went up 6% after opening, then an hour later dropped 7% then up 1% and stabilized.

I would say stock split here is good news. It will make DOL more accessible to other buyers. More will flood in, price will go up.
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Nov 16, 2004
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Toronto
Urban, on a side note, I have to say I really like Dollarama, just as a business as well.
At least in the GTA, every store that I walk into, they are busy. The store is run with very few, likely minimum wage staff and the store doesn't like lines - they call for back up.
However, there's always a line - because they are busy. At Christmas, the place was rammed.

Mind you, things happen, like getting foreign-made products into Canada (maybe) or just a shift in people's behaviour, but right now, Dollarama seems to be the go-to for a lot of things. Even here on RFD, it seems to be a store to "check out" to see what's new and interesting, look at all the RFD threads that go up on action figures and really random things, found at Dollarama.

There's a lot more to a profitable stock but at least from the retail side of things, the business always seems to be doing well. Some stores I walked into this past Christmas were dead - meanwhile Dollarama was booming.
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