Mutual Funds






America's Fastest Growing Independent Financial Advisory Network
A Nationwide Network of 100% Independent & 100% Objective Fee-Only Financial Advisers

Picture of The-Adviser The-Adviser.com The place to come for answers™
What should I do when my stock splits?
By The-Adviser.com -   

Money Management
Portfolio Reviews
401(k) Rollovers

Financial Plans
Estate Plans
College Savings
Clients Only

Available Services
"Interview Us"
Fee Information

Clients Only

The Press


Home Page

Related Links

Stock Quotes

New York - Companies generally split stock when the stock has reached a price that individual investors are often reluctant to buy a full lot or 100 shares because it costs so much. Corporations generally split their stocks to lower the price and stimulate trading.

When a stock is split, there are more shares available but the total market value of the company stays the same. For instance, after a stock splits, if you owned 100 shares of stock at $50 per share you would own 200 shares at $25 per share. In effect, a stock split is no different than getting four quarters for a dollar bill. When your stock splits, you should do the following:

  • If you maintain your investments in a brokerage account - your additional shares should be delivered directly to your account by your broker. All you need to do is ensure that on your next statement you properly get credited for the total amount of shares that you have. If not, call your broker immediately.

  • If you maintain your stock certificates in your possession - you should be sent additional shares directly by the Company’s   transfer agent. These agents maintain shareholder lists and should automatically send you them within a few days after the date the stock is effective. If you do not receive your shares within 7 days of the effective date, we recommend that you contact your company’s transfer agent immediately or contact the company’s stockholder public relations department.

Many academicians believe that there is no fundamental difference between a pre and post split stocks. The reasoning is that the total market value of the company is the same. We believe that stock prices generally rise after a stock splits simply because new investors are attracted to it and are able to make round lot purchases.

Click here to learn about our professional money management accounts


In Association with Amazon.com

Regardless, of what academicians write and say, we believe that stocks generally rise after a stock split.

Got an investment question?
Ask The-Adviser.com

Open a professionally managed account:

  • Brokerage Accounts
  • Traditional IRAs
  • Roth IRAs
  • 401(k) IRA Rollovers
  • 403(b) IRA Rollovers
  • College Savings
  • Retirement Savings

Hire The-Adviser.com

Click here for our Top Ten Investment Picks

Financial Advisory Services
Money Management
Retirement Planning
Portfolio Reviews
401(k) Rollover Assistance
College Savings
Financial Plans

In Association with Amazon.com

You don't need to be rich to hire a Financial Adviser. Just Smart

The Independent Adviser Corporation is a Registered Investment Adviser that specializes in developing investment strategies for individuals, families and businesses.
Click here to learn more about our Fee-Only services

Do you have a question about your investments?
Ask The-Adviser.com

America's Independent-Adviser.

© Copyright.  The Independent Adviser Corporation.  All rights reserved. Important Legal Information