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Home Value Investing Stock Split Question

Stock Split Question
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4:23 pm
January 19, 2010


Jae Jun

Admin

posts 1336
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A stock split only affects the shares and the price, but nothing else has changed.

Since the shares outstanding is now 25m, if the stock price was $10, it would be worth $2 now.

So you should use the new number of shares outstanding.

10:47 pm
January 17, 2010


DrSues02

Member

posts 45
1

Might be a newbie-type question but its late, and I've been starting at numbers all night. Having a hard time wrapping my head around this.

Question about how to deal with stock splits:

Company announces 5-for-1 stock split on Nov 30th to occur on Dec 30th.  5m shares oustanding from the last 10-Q filed on Dec 15th.

So if I'm looking at the company today (Jan 17th), the stock split has occurred and there are really 25m shares outstanding?  If I'm trying to come up with a fair value today, should I be using the 25m number or the 5m number for shares outstanding? 

Probably a basic question so hopefully an easy answer!
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