Monday, August 4, 2025

Financial Literacy By Anthony Jeanty / Stock Splits Information | Stock split advantages and disadvantages - Types of stock splits - How a Stock Split Works

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Stock split advantages and disadvantages.

 Types of stock splits - 

How a Stock Split Works

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Some investors may avoid expensive stocks because they can’t afford a single share. High prices can also create the misleading perception of inflated valuation.

Stock splits are common, especially for companies with significantly rising share prices. While often viewed as a positive signal for a company’s future, a stock split doesn’t guarantee continued price growth.

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 A stock split is a corporate action that increases the number of outstanding shares while reducing the share price proportionally, without changing the overall market capitalization of the company. 

 Stock Split?

There are two types of stock splits: forward and reverse splits

  • Forward stock split: The most common split, the forward stock split, is an action taken by a publicly traded company to divide one common share into a set number of smaller shares without diluting its market capitalization or a shareholder’s ownership stakes.
  • Reverse stock split: Also called a reverse split, a reverse stock split dilutes the share price but not the total valuation. A company’s board of directors decide to issue more shares of its stock to current shareholders and grow its outstanding share count while maintaining its original market capitalization. The value of the split shares combined equal the original value of the single share. Therefore, a 2-for-1 stock split would mean a single share worth $60 would be split into two shares worth $30 each. 

Whatever the split ratio, the value is also split by the same ratio. A 3-for-1 (which can be denoted as 3:1) stock split for a $60 stock would result in three shares valued at $20 each. 

The number of shares would increase, but the value of the shares would remain the same. If a company has one million outstanding shares worth $10 each, then a 2-for-1 stock split would result in 2,000,000 outstanding shares worth $5 each. 

If you owned 100 shares at $10 a share, your investment would be worth $10,000. After the 2-for-1 stock split, you would own 2,000 shares at $5 a share and your investment would still be worth $10,000. 

What does a 4-for-1 stock split mean for a stock trading at $100? It means there will be four times more shares outstanding trading at $25 each post-split, or after the split takes effect.

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Real estate investment trusts, and crowdfunded https://twitter.com/visiononerealA real estate option is a specially designed contract between a buyer and a seller.
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The buyer purchases the option to buy or not buy the property during that time. https://www.facebook.com/.../Antonyreale.../Antonyrealestate
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Real estate options aren’t available on exchanges, they don’t have fluctuating prices beyond the contracted premium, and they don’t usually cover multiple units. Real estate options are most heavily utilized in the commercial real estate market but they can be used by regular investors too. WWW.FACEBOOK.COM/WORLDCLASSREALESTATE
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, real estate options are used for targeted situations in which a buyer will benefit from an option but not a requirement to buy real estate by the end of a holding period. WWW.VISIONONEREALESTATE.BLOGSPOT.COM
Real estate options come with an additional level of complexity as well as their own unique parameters.
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IMPORTANT INFORM
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can be a multitude of drafted real estate options incorporated as part of a real estate purchasing contract agreement. Some of the most common include:
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How a Stock Split Works

What does it mean when a stock splits? The term “stock split” can be misleading because it implies that a company cuts a share of stock into pieces determined by the announced ratio, like taking scissors to a stock certificate and cutting it in half for a 2-for-1 stock split. That’s not what happens. It’s the opposite effect — shares are actually duplicated, not divided. 

Stock splits create new shares at a cheaper valuation. The share price purposely gets diluted, but market capitalization stays the same as do the ownership stakes for shareholders. Stock splits are granted to existing shareholders, who receive new additional shares at a discounted ratio to the original share. 

You receive more shares, but the value of each share drops in proportion to the ratio. For example, if you own 100 shares of a $10 stock, then a 2-for-1 stock split would grant you an extra share of stock worth $5

added to your existing share of stock now worth $5, leaving you with 200 shares of stock at $5 each. Keep in mind that the cost basis per share will also change when it comes to taxes. The end result leaves you with more shares but worth the same total value. Let’s take a look at three stock split steps.

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What is a Stock Split?
A stock split occurs when a company divides its existing shares into multiple new shares. For example, in a 2-for-1 stock split, a shareholder with one share will now have two shares, but the price per share will be halved.

 If the original share price was $100, after the split, each share would be worth $50. This action does not change the total value of the investment; it simply increases the number of shares while decreasing the price per share.

 A stock split is essentially a way for a company to increase the number of shares each investor holds, without changing the total value of their investment. The main idea is to lower the price per share, making the stock more accessible, especially for retail investors who may have found it too expensive to buy in before. 

 What does a stock split mean? A stock split happens when a company increases its shares in order to boost liquidity of a stock. The dollar value of all shares stays the same, however. Many companies commonly issue 2-for-1 and 3-for-1 stock splits.

Recent reverse stock splits include:

  • Purple Biotech Ltd. (PPBT) - Reverse 1-for-20 on September 17, 2024
  • Nuvve Holding Corp (NVVE) - Reverse 1-for-10 on September 17, 2024
  • Mullen Automotive Inc (MULN) - Reverse 1-for-100 on September 17, 2024
  • Luokung Technology Corp (LKCO) - Reverse 1-for-8 on September 17, 2024
  • Hyzon Motors Inc (HYZN) - Reverse 1-for-50 on September 11, 2024
  • Sirius XM Holdings Inc (SIRI) - Reverse 1-for-10 on September 10, 2024
  • Draganfly Inc (DPRO) - Reverse 1-for-25 on September 5, 2024
  • Lightinthebox Holding Co Ltd. (LITB) - Reverse 1-for-6 on September 5, 2024
  • Better Home & Finance Holding Co. (BETR) - Reverse 1-for-50 on August 19, 2024
  • Ginkgo Bioworks Holdings Inc (DNA) - Reverse 1-for-40 on August 20, 2024
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Stock split advantages and disadvantages

Stock splits are a common strategy used by publicly traded companies. Although they’re typically seen as market-neutral events, stock splits come with distinct advantages and disadvantages.

Whether or not investors benefit from a stock split depends on several factors, such as timing, market perception, and investor behavior.

Stock split advantages

Companies often choose to split their stock when the share price has risen significantly. Here are four key advantages of a stock split:

  • Increased liquidity: By lowering the price per share, stock splits make it more affordable to purchase standard lots of 100 shares. This lower price, combined with a greater number of shares in circulation, can boost liquidity, making it easier and cheaper for investors to trade the stock;
  • Wider appeal to new investors: A lower share price can attract new investors who may have been deterred by a higher price. This can serve as a marketing tool, increasing demand for the stock;
  • Psychological perception: Stock splits often generate media buzz, especially when high-profile companies like Apple or Nvidia undergo splits. This has led to an association between stock splits and growth or success. The perceived affordability following a split can enhance a company’s image and draw in new investors;
  • Promote optimal share price: Stock splits can help a company maintain its share price within a targeted range to stay competitive and attract investors. Since a company can split its stock multiple times, this practice can help achieve and maintain an ideal share price.
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Stock split disadvantages

While stock splits aim to improve a company's image and lower its share price, their impact has limitations. Here are five key disadvantages:

  • No change in fundamental value: No matter how often a company splits its stock, the intrinsic value of the business remains unchanged. The company’s market capitalization stays the same, and there are no direct effects on its financial performance;
  • Increased costs: Despite not affecting the company’s underlying value, stock splits can create additional costs and administrative complexities;
  • Perception of shareholder dilution: Although stock splits don’t dilute actual ownership, some investors might feel that holding more shares at a lower price devalues their investment, leading to a perception of reduced value;
  • Potential volatility: Stock splits can attract short-term traders and speculators, which may result in increased volatility and exaggerated price swings. While this can offer higher upside potential, it also brings increased downside risk
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  Some companies do the opposite with a reverse stock split, where they combine shares to raise the price per share. Again, the company’s total value stays the same, but this move often helps meet stock exchange rules – like Nasdaq’s minimum price requirement – to avoid the risk of being delisted.

MacKenzie Realty Capital (MKZR) – MacKenzie Realty Capital is a real estate investment issuer focused on managing a portfolio of income-generating assets. On August 1, the company announced a 1‑for‑10 reverse stock split aimed at meeting Nasdaq’s minimum bid price requirement and preserving its listing status. The split takes effect on August 4. With shares down 84% this year, the company’s strategy seems to be generating everything but returns.

Bollinger Innovations (BINI) – Bollinger Innovations, an electric vehicle company based in Michigan, intends to implement a 1‑for‑250 reverse stock split – the maximum ratio approved – to avoid Nasdaq delisting. The split was approved by shareholders on July 22, and will become effective August 4.

Ostin Technology Group (OST) – China-based Ostin Technology supplies display modules and polarizers for consumer electronics and automotive industries. On July 28, the company announced a 1‑for‑25 reverse share split to meet Nasdaq’s minimum bid price requirement and maintain its listing. The split is set to take effect on August 5.

Spruce Biosciences (SPRB) – Spruce is a biopharmaceutical company developing treatments for neurological disorders. On July 24, the company announced a 1‑for‑75 reverse stock split to regain compliance with Nasdaq’s $1 minimum bid price rule. The split will become effective on August 4, with split‑adjusted trading beginning at the open on August 5.

Calidi Biotherapeutics (CLDI) – Calidi Biotherapeutics is a clinical‑stage biotech firm pioneering targeted virotherapies. On July 25, the company announced a 1‑for‑12 reverse stock split aimed at elevating its trading conditions and appeal under NYSE American listing standards. The split will be effective on August 5.

 Acurx Pharmaceuticals (ACXP) – Acurx is a clinical-stage pharmaceutical company developing novel anti-infective therapies. On July 31, the company announced a 1‑for‑20 reverse stock split aimed at regaining compliance with Nasdaq’s minimum bid price rule. The split takes effect before market open on August 5.

 

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  • Successful underlying performance: Stock splits tend to be associated with successful underlying performance as a company’s stock price rises out of reach.
  • More affordable: The cheaper share prices post-split make it more affordable for investors to buy into stocks that may have been out of reach before.
  • Bring new investors in: Stock splits bring new investors into the stock, making it more accessible while diversifying its shareholder base.
  • Drive up share prices: Stock splits tend to drive up share prices on the announcement date and after the effective date as new shareholders buy up the cheaper shares.
  • More liquidity: The increase in outstanding shares and new shareholders also enables more liquidity, often resulting in tighter bid and ask spreads, resulting in less volatility and slippage.
  • Magnified profits: You’ll see gains as a shareholder of record. For example, owning 100 shares of a $40 stock that rises $1 produces a $100 net gain, but after a 4-for-1 split, owning 400 shares of a $10 stock that rises $1 produces a $400 net gain.
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    Stock Splits vs. Reverse Stock Splits 

    The second and less common type of stock split, a reverse stock split, is the opposite of the forward split because it attempts to reduce the outstanding shares as it elevates the value of each share. A reverse split converts each outstanding share into a partial share of stock relative to the announced ratio. 

    Therefore, a 1-for-10 reverse stock split on 100 shares of a $1 stock results in 10 shares of a $10 stock afterward. A forward stock split implies strong performance for the company but a reverse stock split implies the opposite. Companies that may be at risk of delisting will execute a reverse stock split to get the share price back up.

    Broadcom stock split

    Chipmaker Broadcom (AVGO) completed a 10-for-1 stock split on July 12 after market close. Before the split, the AI technology rally had driven the company’s stock price above $1,700 per share. The 2024 split was the first in the company’s history.

    Chipotle stock split

    Chipotle Mexican Grill (CMG) completed a 50-for-1 stock split on June 26. Before the split, the company’s stock price was above $3,200 per share. The split was the first since Chipotle’s initial public offering in January 2006, when its price was just $22. 

    Nvidia stock split

    Nvidia (NVDA) has performed exceptionally well as an investment in the past decade. The company has completed two stock splits in the past three years alone. On July 20, 2021, it implemented a 4-for-1 stock split. It also completed a 10-for-1 split on June 7, when its stock price exceeded $1,200.

    GE stock split 

    General Electric (GE) completed a different type of restructuring in 2024. On April 2, GE completed a spinoff of its energy business into a separate company. Unlike a stock split, which splits shares of stock, a spinoff splits the company into separate public companies. Each GE shareholder received one share of the new GE Vernova (GEV) for every four shares of GE stock they held.

    Walmart stock split

    Walmart (WMT) completed a 3-for-1 stock split on Feb. 22 after the market closed. Before the split, the company’s stock price had climbed above $170 per share. The 2024 split was Walmart’s first since 1999. 

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    Here are some of the 2024 stock splits coming up.

    Split dateStock symbolCompany nameSplit typeSplit ratio
    Oct. 28, 2024KZIAKazia Therapeutics LimitedReverse1 for 10
    Oct. 28, 2024SVRESaverOne 2014 Ltd. ADRReverse1 for 18
    Oct. 30, 2024NANano Labs Ltd. Sponsored ADR Class AReverse1 for 10
    Oct. 31, 2024TKLFYoshitsu Co. Ltd. Sponsored ADRReverse1 for 10
    Nov. 4, 2024RGBPRegenForward0.5 for 1
    Nov. 5, 2024NVMLFNavarre Minerals LimitedReverse1 for 500
    Nov. 5, 2024RDYDr. Reddy’s Laboratories LtdForward0.2 for 1
    Nov. 20, 2024IVIXFInvion LtdReverse1 for 100
    Nov. 25, 2024PENMFPeninsula Energy LimitedReverse1 for 20
    Dec. 17, 2024BMNAFSi6 Metals LimitedReverse1 for 20

     

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      Remember To Cut Back on Unnecessary Expenses In Order To Have More Assets Than Liabilities.

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      . Take Care Of Yourself Well By Late 40s, early 50s..

      The midlife crisis can start to sneak up on people. Divorce, separation of couple happen and that is not good benefit.

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      1. Many people feel burned out or stressed at work

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      4. Burning out could negatively affect your health and finances and add additional layers of stress onto an already challenging situation.

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      Get a Grip on Retirement Income Planning

      Retirement income planning should start earlier but in your 50s take it more serious, start taking less risk.

      This means sitting down and seeing how much you have saved, listing your expenses and figuring out the income you can generate in retirement.

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      Make sure you take the time to envision what life will be like after you stop working. Take a look at what you want to do and consider phasing into retirement by going part-time.

       

      If you're single, retirement could be more challenging for you since you leave behind the relationships you've built in your workplace.

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      Brush Up on Your Estate Planning by the end of 50s and review it by 60s.

      Your living and or living trust must be in good standing well organize.

      While you should start your estate planning basics early in life, when you near retirement, it's good to do a full overview of your estate planning.

      This can include reviewing what insurance you have and whether it's still needed or if you need more.

       

      You also need to review your estate planning documents to make sure they're in order and that all of your assets are properly titled. Do another beneficiary review, especially as assets start to get turned into retirement income.

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      A rule of thumb in your 60s:

      As you head into retirement, make sure you understand the 4% safe withdrawal rate for retirement spending. The rule states that historically in the U.S., with a 50% bond investment and a 50% stock investment, you could afford to spend 4% of your investments a year and not run out of money for 30 years. This is a conservative approach. KNOWLEDGEFINANCIAL.BLOGSPOT.COM

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      Enjoy Life

      You've worked hard your whole life, and you should enjoy your retirement. Having a sound financial plan that shows what you can spend and how long your money will last can allow you to do just that.

      A lot of people worry about having enough money in retirement, so they hoard their money, refuse to spend it and ultimately don't enjoy themselves.


    • They're too fearful about the uncertainty of the future. Having a plan can help you live the lifestyle you want.

      Tip No. 2: Make Your Money Last a Lifetime

      A big part of planning for retirement while working and is about saving, investing and growing your wealth.

      Once you get into retirement, you need to monitor how your plan is doing and make any adjustments necessary.

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      Don't forget to plan and manage your required minimum distribtions (RMDs) from IRAs and 401(k)s.

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      As you start to spend down your money, keep track of your spending percentage of your assets.

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      Use the 4% rule to help monitor your plan over time. If your withdrawal rate from your assets starts nearing 8% to 10%, you might want to consider cutting back on expenses.

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    • Understanding Credit

      Credit gives you the ability to purchase large items when you don't have the
      money available. It involves borrowing money with the understanding that
      you will pay back at a later time. Credit also helps build reputation as a
      borrower.

      The more disciplined you are at repaying those loans, the better credit
      history you will build. Good examples of credit are Student and car loans,
      as well as credit cards..
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      Different Types of Credit

      It's important to be aware of the different types of credit so that you can be
      sure that you match the right type of credit to your needs. There are three
      main types of credit:

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      Open-end Revolving credit (Secured and Unsecured)                          

      ■ Open-end 30-day credit

      ■ Closed-end credit

      Open-end, Revolving Credit

      The first type of credit is open-end revolving credit. This kind of credit
      comes in two types: secured and unsecured.
      ===============

      Open-end, Unsecured, Revolving Credit

      This type of credit requires that you have a fixed credit limit and pay at least
      the minimum due on your outstanding account balance each month. The
      minimum payment will be a percentage of your card's total balance.

      The interest rates associated with open-end credit can be quite high,
      especially if you have a poor credit history or you don't shop around for the
      best deal. Examples of this type of credit include bankcards like MasterCard
      and Visa and many retail store charge cards.

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      =========
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      Open-end, Secured, Revolving Credit

      This type of open-end credit requires you to secure your credit card
      purchases by keeping a certain amount of money in a saving account or by
      buying a certificate of deposit for a certain amount.

      Then, if you do not pay your account on time or if you go over your credit
      limit, the credit card company can tap those funds. Often, people with poor
      credit histories or no credit history at all must use a secured MasterCard or
      Visa card until they can qualify for one that is unsecured.

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      Open-end, 30 Day Credit

      The second main type of credit is Open-end 30-day credit. This type of
      credit usually comes with a high credit limit, but you must pay your
      outstanding account balance in full each month.

      The American Express card is the most common example of open-end, 30-
      day credit.

      ============
      Closed-end Credit

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      Lastly, the third type of credit is closed-end credit. When you are approved
      for a mortgage, finance the purchase of a car, obtain a student loan, or
      some similar purchase, you are using closed-end credit.
    • Building Your Credit

      The Four Steps of building credit

      There are four basic steps to building your credit:

      ■ Develop a savings habit. Saving as much as you can is important, but
      saving regularly is even more important. Get in the habit of regular
      contributions to a savings account or money market fund --whichever
      offers the best interest rate.

      Take advantage of any direct deposit programs your employer may offer.
      It's easier to get into the savings habit when the money is never in your
      checking account, and goes directly into your savings account or
      money market fund.

      ■ Review your Equifax, Experian and TransUnion credit histories and
      get problems corrected. You do not want problems to get in the way of
      building your credit. To get sample letters to dispute mistakes with the
      Credit Bureaus, please click here.

      ■ After you have saved between $500 and $1,000 in savings and
      resolved any problems in your credit records, apply for a MasterCard or
      Visa. Shop around to find the card with the best terms of credit that you
      can qualify for. If you can't get an unsecured MasterCard or Visa, apply
      for a secured card.
      ==============

      Credit and Saving: Four Good Reasons to Save Your Money

      Another important part of rebuilding your credit is to save. Here are four
      quick reasons why saving is so important:

      ■ If you lose your job tomorrow, the money in your savings account will
      help you pay your bills.

      ■ If you have an unexpected large expense, you can use your savings to
      pay it rather than having to use credit.

      ■ When you begin the credit rebuilding process you may need money in
      savings in order to qualify for a secured MasterCard or Visa.


      ■ Creditors will feel more comfortable about extending credit to you
      when you have a healthy balance in your savings account.
    •  

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