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Credo Petroleum Corp. Message Board

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  • mountaincelt2002 mountaincelt2002 Apr 26, 2004 5:42 PM Flag

    Buffett doesn't split BRKa

    This is both true and untrue. It has no immediate impact on value and that is fairly obvious. But it has several beneficial effects that may later impact value. First. It increases the nuimber of shares outstanding and tradable thereby making it possible for institutional holders to justify buying. Second, it reduces the p[er share price making 100 shares of the stock afforable to a larger group of potential shareholders. Of course, a company does not want to reduce the stock below the emotional threshhold of $10 per share. The real reason gold old Warren Buffet does not split his stock is that he wants only big boys with lots of cash as shareholders. They tend, and I emphasize the word "tend", to be more sophisticated and trade less. Traders nearly always get burned.

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