How should I handle a Forward Split?

erwin1978

Golden Member
Jun 22, 2001
1,637
3
81
Ok my super stock is doing a forward split. For every 4 shares I'll get 5. All shareholders of record as of February 8, 2008, will receive the shares called for in the forward split. Any fractional shares will be rounded up to the next share.

Any tips on how I should handle this situation? Last time a super stock of mine was distributing dividends and I didn't pull out the day before the ex-dividend date which brought the price down.
 

Crusty

Lifer
Sep 30, 2001
12,684
2
81
Who cares if the price goes down, that's what happens with dividends. Instead of receiving a cash dividend, you will be receiving shares of the stock. Your market value should remain the same after the split.
 

erwin1978

Golden Member
Jun 22, 2001
1,637
3
81
Originally posted by: Crusty
Who cares if the price goes down, that's what happens with dividends. Instead of receiving a cash dividend, you will be receiving shares of the stock. Your market value should remain the same after the split.

Well, had I sold prior to the ex-dividend date I could have rebought the stock at a lower price and gotten my dividends. But I wasn't equipped with that info then.
 

Dacalo

Diamond Member
Mar 31, 2000
8,780
3
76
I don't understand the questions. Stock dividends do not affect the stock value. Ex: 200 shares of $20 stock after 2:1 split = 400 shares of $10. Both still $400.

So even if you bought the stock for "higher" price, you would have twice as more shares after the split.
 

erwin1978

Golden Member
Jun 22, 2001
1,637
3
81
What I'm asking is if the Forward Split goes into effect a few days after the record date(which is Feb 8).
 

Fritzo

Lifer
Jan 3, 2001
41,895
2,135
126
Put english on the bowling ball so it curves to the right and hits the 7 pin on the left side hard. If it hits hard enough, it will bounce off the backdrop and hit the 10 pin as well. If you're right handed you can do the same thing with the 10 pin.




:D
 

erwin1978

Golden Member
Jun 22, 2001
1,637
3
81
Let me ask a simple question. It says the record date to qualify for the split is Feb 8. If I sell my shares on Feb 8 do I still qualify for the split?

May be the dividend thing has got me all confused because it also has a record date and the ex-div date. Come on. Someone has got to know what I'm talking about.
 

Crusty

Lifer
Sep 30, 2001
12,684
2
81
I believe you would have to pay the person you sold your stock to the dividend if you sell the stock before the exdate, thus preventing someone from doing exactly what you say.