According to the company RPC.INC's website (Symbol RES), there was a three-for-two stocks split a few weeks ago.
The split was effected by issuing one additional share of common stock for every two shares of common stock held.
I bought 100 shares at $15 each (total value $1,500) just before the split.
Just after the split, my account shows I own 200 shares at $10 each (total value of $2,000).
I don't understand why the number of shares I own increased from 100 to 200 as the split is 3 for 2 and not 2 for 1.
I thought my account should show 150 shares at $10 each (same total value of $1,500)?
Why do I own 200 shares and not 150? I made an unrealised profit of USD 500 in the process but I don't understand why. I believe that in theory, stock splits should not create profit/loss as the increase in the number of shares should be compensated by the decrease in the price per share?
The split was effected by issuing one additional share of common stock for every two shares of common stock held.
I bought 100 shares at $15 each (total value $1,500) just before the split.
Just after the split, my account shows I own 200 shares at $10 each (total value of $2,000).
I don't understand why the number of shares I own increased from 100 to 200 as the split is 3 for 2 and not 2 for 1.
I thought my account should show 150 shares at $10 each (same total value of $1,500)?
Why do I own 200 shares and not 150? I made an unrealised profit of USD 500 in the process but I don't understand why. I believe that in theory, stock splits should not create profit/loss as the increase in the number of shares should be compensated by the decrease in the price per share?
