BANI: announced 12:1 split, what does this mean?
Banneker Inc. announced approval of a stock splits at a 12:1 ratio on Feb. 2, 2009 and has since seen a 300% increase from {content}.15 to {content}.46. I am new to trading and have been watching stocks as well as trying to learn the stock market for the past 6 months, what does the splits mean exactly? It is effective Feb 6, 2009. So if I invest in it now, I will obtain 12 times the stock I bought on the 6th and their value will decrease by 1200%? Is there anyone that can give me a 2-minute lesson on "Stock Splitting for Dummies"?
Comments
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If you already held shares of the stock, then the price splits to 1/12th the price in value and you are given 12 times in quantity of shares, which is a net equivalent.
Stay away from penny stocks if you’re a newbie (or really any-bie) until you know the general stock market.
Find an online broker like TD/OX/CS/TOS, get an account and you will have access to general definitions, support, news, and strategies.
July 7th, 2010 at 4:22 pm
When a company’s existing shares are divided into multiple shares it is a stock split. Although the number of shares outstanding increases by a multiple of 12 in your example, the total dollar value of the shares remains the same compared to pre-split amounts, because no real value has been added as a result of the split.
The split itself has not increased the value of this company by 3 times in two days. Be very careful when you are dealing with penny stocks they are unlisted stocks and are notorious for share price manipulation.