Never had that happen before. Last check it CSX was at 63.00 a share
It is not a “reverse split” which is something like you would get one share of stock for each two shares that you own. The CSX board of directs declared a 2 for 1 stock split which means that after the split you will have two shares for each one share that you now own. After the split you will get a 10 cent per share dividend for each of the share that you will then hold.
The split will not necessarily change the value of your holdings. You can expect the price per share to drop by about 1/2 after the split.
Jay,
Do reverse splits exist? I’ve heard a lot about the splits you outlined above, and many of the RR Sims (Rail Tycoon, etc.) incorporate them into play. However, I can’t say that I’ve heard of the reverse ever happening. Seems like it could be a nightmare with all the stockholders that would have an odd number of stocks. Thanks in advance for any insight.
Looks like they want to buy back my shares? Over my dead body!
http://www.csx.com/share/investors/downloads/docs/Final_Q2_2006_Earnings_Release-REF23069.pdf
I own stock in CAGY Industries - the parent company of the Columbus & Greenville Railroad in MIssissippi. About 8 years ago they did a 1 FOR 200 reverse split! My 600 shares became 3 shares!
Historically, CSX has wanted it’s stock trading in the $25/30 a share range. When the stock appreciates, for whatever the reason, to amounts of approximately double their desired trading range they will have a split to reduce the per share price back to their target range. In the early 80’s with the stock trading in the $70’s for a period of time CSX had a 3-1 split.
Reverse Stock Splits
A reverse stock split reduces the number of shares and increases the share price proportionately. For example, if you own 10,000 shares of a company and it declares a one for ten reverse split, you will own a total of 1,000 shares after the split. A reverse stock split has no effect on the value of what shareholders own. Companies often split their stock when they believe the price of their stock is too low to attract investors to buy their stock. Some reverse stock splits cause small shareholders to be “cashed out” so that they no longer own the company’s shares.
A company’s board of directors may declare a reverse stock split without shareholder approval. Although the SEC has authority over a broad range of corporate activity, state corporate law and a company’s articles of incorporation and by-laws govern reverse stock splits.
If a company is required to file reports with the SEC, it may notify its shareholders of a reverse stock split on Forms 8-K, 10-Q and 10-K.
http://www.sec.gov/answers/reversesplit.htm
Dave
Priceline.com had a 1 for 6 reverse split shortly after the .com bust. I believe the main reason was so that institutional investors could keep buying the stock. If I remember correctly, once a stock goes below $5.00, institutional investors are not allowed to buy the stock. Jay