When does a R/S benefit shareholders? Here are som
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Posted On: 06/14/2015 6:45:34 PM
When does a R/S benefit shareholders? Here are some examples:
In mid-2003, Priceline.com (NASDAQ: PCLN) did a 1-for-6 reverse stock split, lifting its stock price from around $3.50 per share to $22, as many investors believed that the William Shatner-led Internet travel service would fade away with so many other dot-com companies. Now, 12 years later, the stock trades above $1,200 per share, giving long-term investors a 50-bagger with room to spare.
Corrections Corp. of America (NYSE: CXW) traded as low as $0.60 per share in 2001 before reverse-splitting 1-for-10. Since then, the private prison-services provider has seen its stock jump more than tenfold, with two regular splits helping to drive the company's total return higher.
There you go. If a R/S is done for the right reasons, and the company's leadership is directing business in a profitable direction, then a R/S is one of the best things that can happen to a company.
In mid-2003, Priceline.com (NASDAQ: PCLN) did a 1-for-6 reverse stock split, lifting its stock price from around $3.50 per share to $22, as many investors believed that the William Shatner-led Internet travel service would fade away with so many other dot-com companies. Now, 12 years later, the stock trades above $1,200 per share, giving long-term investors a 50-bagger with room to spare.
Corrections Corp. of America (NYSE: CXW) traded as low as $0.60 per share in 2001 before reverse-splitting 1-for-10. Since then, the private prison-services provider has seen its stock jump more than tenfold, with two regular splits helping to drive the company's total return higher.
There you go. If a R/S is done for the right reasons, and the company's leadership is directing business in a profitable direction, then a R/S is one of the best things that can happen to a company.
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