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Why does a stock split?

Written By: brian - Oct• 27•06

Link: Why does a stock split?

“But remember — $200 for a great stock is still a better deal than $2 for a lousy one.”

Exactly. It’s primarily marketing. Warren Buffett never split shares in Berkshire Hathaway (Class A) and that fund seems to have done pretty decent, historically.

I know sometimes funds will do reverse splits (ex: 1:10 split where you get 1 share for every 10 you own) to increase share price to keep it from being delisted, but that’s probably not a stock you want to have in your portfolio.

Splits play no part when I’m deciding to buy a stock.

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