RIMM 3/1 split

[insaneinvestor]

Quote from optioncoach:

Anyone who would buy it at $68 or pay $6,800 for 100 shares post split would simply by 33 shares at $206 now.

After the split they will have about 100 shares at $68 if it happened right now. SO whether you buy 100 shares post or 33 pre, you are in the boat.

The split changes nothing.

Hmmm I must have a mental problem.
After the split, the stock price goes down no? IE 762 to 260 or whatever I said above....

So, therefor if you would please explain how, after the price goes down, I would not get more shares for the same amount of money by waiting.

( I am obviously missing something cause two people are telling me I am wrong...)

After the split, the same amount of capital investment does not buy you a higher number of shares?

-- I do like being in the boat though. even if I am in the "slow" section.

 

[spindr0]

Quote from insaneinvestor:

be that as it may,
70 shares at $254 = $25,146
33 shares at $762 = $25,146

You might want to check your math

 

[mde2004]

You show your ignorance each time you post about buying RIMM options for the split to make money, wtf are you smoking.

 

[spindr0]

Hmmm I must have a mental problem.

After the split, the stock price goes down no? IE 762 to 260 or whatever I said above....

So, therefor if you would please explain how, after the price goes down, I would not get more shares for the same amount of money by waiting.

Well, if you have a mental problem, at least you have a good attitude about it

Let's say the stock is $210 and you buy 100 shares. Cost is $21,000. After the 3:1 split, you will have 300 shares at a cost basis of $70 per share which is the same $21,000. The split has no effect on the value of the position. Only the stock rising or falling does that.

If you bought 33 shares now (pretend it's 33-1/3 so the math works out), your cost would be $7,000. After the split, you will own 100 shares @70 which is the same $7,000.

The short answer? Buy the stock because you think it's going up, not because it's going to split.

 

[Optionspoet]

Quote from spindr0:

The short answer? Buy the stock because you think it's going up, not because it's going to split.

Exactly. The stock's reaction to the split, whether negative or positive, is for the most part based on short term speculation of the stock and the long term outlook of the company (combined with the overall state of the market). If you believed that a stock split would lead to a run-up in price, then why wouldn't everyone else be on the lookout for stock splits?

If you were to obtain the total population of stocks that have split over the past few years and track their performance for a period of time after the split, I'm sure the confidence in your assumption would be waivering. At best, you'll be looking at a 50/50 possibility of walking out with a profit. Given those odds, I would just revert back to the dart-board method.

 

[insaneinvestor]

I guess now we just wait and see.

Thanks for the replies.

 

[insaneinvestor]

Quote from mde2004:

You show your ignorance each time you post about buying RIMM options for the split to make money, wtf are you smoking.

Your wife! You should try some. It may do wonders for your attitude. :eek:

 

[spindr0]

Quote from Optionspoet:

The stock's reaction to the split, whether negative or positive, is for the most part based on short term speculation of the stock and the long term outlook of the company (combined with the overall state of the market).

Some years ago someone did a study of the results after stock splits.
The results? It was rocket science stuff !! (g)

Companies with good earnings went up and vice versa.

The kiss of death? The reverse split... sort of like a step in the fabrication of wallpaper

 

[HoustonRemote]

When I order a submarine sandwich I always ask them to cut it into three pieces. That way I get three times as much food for the same price.

 

[insaneinvestor]

HAHAHAHAHAHAHAHAHA

I am here to learn jackasses. I see the error in my ways thanks to THIS board!

Were you not ever a beginner?

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