Simple question about Stock Splits

[ROcHE]

I have a small research to do about Ebay Inc.

Here is some stuff you can read on their website :

When did eBay go public and at what price?
eBay went public on September 24, 1998 at an IPO split adjusted price of $1.50.

Has eBay had any stock splits?
eBay has had three stock splits since going public.

The first split was a 3 for 1 stock split which occurred on March 2, 1999 at the open of the market. The second split was a 2 for 1 stock split which occurred on May 25, 2000 at the open of the market. The third split was a 2 for 1 which occurred on August 29, 2003 at the open of the market.


Does it mean that someone who bought 1000 shares at 1.50$ (1500$) have 12 000 shares now?

First split 3 for 1 = 1000 x 3 = 3000
Second split 2 for 1 = 3000 x 2 = 6000
Third split 2 for 1 = 6000 x 2 = 12000

12000 x value of the share now (92.44$) = 1 109 280 $

If true, I should have invested:Q

 

[Kelemvor]

Normally, when stocks split, the number you have gets increase but the value of each is decreased so you don't end up with any more money...

100 shares at $50 vs 200 shares at $25. They just split because when the price gets too high, people won't buy it. So they split the stock, double everyone's shares, and then the price is more appealing to new buyers.

 

[spidey07]

looks correct to me.

A stock split doesn't change vaule, only price and number of shares.

 

[Garuda]

Stock splits don't change the market capitalization of a company. Companies like to keep the value of their stock price between 0 and 100. When it's over 100, some economists say that the stock becomes less liquid and the cost of capital goes up. Anyway, when stocks appreciate past $100, companies issue stock splits.

 

[Eli]

Originally posted by: ROcHE
If true, I should have invested:Q

You can say that about just about any stock that has stood the test of time ...

 

[ROcHE]

Yes I know that it does not change the value. But you still have 12000 shares at 92$ no?

You don't get any more money at the time of the split tough.

 

[spidey07]

Originally posted by: ROcHE
Yes I know that it does not change the value. But you still have 12000 shares at 92$ no?

You don't get any more money at the time of the split tough.

your calculations are correct.

 

[ROcHE]

Thanks.

 

[OMG1Penguin]

Originally posted by: ROcHE
I have a small research to do about Ebay Inc.

Here is some stuff you can read on their website :

When did eBay go public and at what price?
eBay went public on September 24, 1998 at an IPO split adjusted price of $1.50.

Has eBay had any stock splits?
eBay has had three stock splits since going public.

The first split was a 3 for 1 stock split which occurred on March 2, 1999 at the open of the market. The second split was a 2 for 1 stock split which occurred on May 25, 2000 at the open of the market. The third split was a 2 for 1 which occurred on August 29, 2003 at the open of the market.


Does it mean that someone who bought 1000 shares at 1.50$ (1500$) have 12 000 shares now?

First split 3 for 1 = 1000 x 3 = 3000
Second split 2 for 1 = 3000 x 2 = 6000
Third split 2 for 1 = 6000 x 2 = 12000

12000 x value of the share now (92.44$) = 1 109 280 $

If true, I should have invested:Q

Looks like they went IPO at $18 ($1.50 * 3 * 2 * 2)

You would have to buy 83 shares originally for $1500 (remainder of $6), you would 996 shares now, worth $92,628 (ebay is at $93 and change at this posting).

Which is a very decent investment return over 6 years, but nothing crazy like your calculations.

 

[ggavinmoss]

That IPO price of $1.50 is split adjusted; I'm pretty sure OMG1Penguin is correct.

-geoff

 

[OMG1Penguin]

Anyways, I sold all my ebay last week and bought google
Only a little bit of tech for me

 

[ROcHE]

Oh. You are right. They say split ajusted price.

 

[ROcHE]

It was 18$.

Link

EBay sold 3.5 million shares at $18. The IPO raised $63 million for eBay, which plans to use the money to expand its operations and boost marketing efforts to solidify its brand. Founder Pierre Omidyar, who owns 14.7 million shares, would be worth $696.3 million on paper.

I've learn something this morning. Thanks.

 

[spidey07]

I suck at teh math.

 

[MikeMike]

damnit weve held onto our IPO on DWRi for a little long now i think. it once was at 18 like 4 days ago and is back approaching 16.

but we did buy it at 12 sooo.... yea.

MIKE

 

[robphelan]

i got in on Ebay's IPO.. had 50 shares at 16.xx. Flipped it same day, netted $900 or so. wish I would have held on to it. but it payed for a flight & hotel to Vegas the next weekend. easy come, easy go.