That's right Vserf. Look above at what the employee stated. Boy were they fed a can of SPAM. He/she stated "it is currently priced too low for the average investor" YOU GOT THAT BACKWARDS maam/sir. It's priced just right for the average investor now and will be too HIGH after the reverse split.
I am an employee, and we were told the following at a corporate-wide meeting.
As a result of the mergers, including the one about to take place with Progress Energy, Duke is ending up with a lot of shares, which is costlier to maintain.
Also, the current share price is deemed to be too low for the average investor.
The reverse split will take care of these two issues.
The other reverse splits that people are unhappy about involved companies that had financial problems. This is definitely not true of Duke.
Someone also compared these anticipated changes with the Spectra spinoff. I really don't see how the situations are analogous. (By the way, if you don't like SE check out SEP.)
A shareholder will not take a hit on their dividend. It just will be calculated diffrently, since each of us will have fewer shares.
There's a recent message on a newer thread about the split and the dividend that says the writer heard from the company and that the dividend will be $3.00 - 3 x 1.00.
I could live with that.
I have to agree with you on the retail investors purchasing less. Not too many of them want to pay $54 or so for each share...of anything.
My other big question is: will the dividend stay the same or is this a way to lower it without our quickly noticing/complaining?
I've had Duke since 3/94 and I remember when they split 2:1 in 2001 it was because it would bring the price down to more people might buy. Now they're doing the opposite. I'm wary of their reason. I may just have to go.
Most of us realize the monetary amount one owns and the dividend will be the same. RE: You'll still have your $9,000 worth of shares for example BUT 2/3 less shares>>>>the .98 dividend(.98x3) will now be $2.94. It's the possible ravaging of the PPS that concerns us. I just can't see investors purchasing more,I see them purchasing less.
Short traders are going to run wild like wolves in a sheep pen when this triples in PPS. You watch. The end of the FIRST day when DUK spun off SE,this ended at $19.14 in January of 2007. With the exception of I think 29 days of which the stock ended above $19+>>>>this stock has been totally manipulated by short traders like clockwork and for FOUR years the PPS has went no where. THE PRICE PER SHARE IS LOWER TODAY THAN IT WAS THE DAY OF THE SPIN OFF 55 months ago !! This reverse split is nothing but a delusional ploy except the short traders are going to pillage it.
Microsoft has a PPS of $24.72 with a market cap 9 TIMES what DUK is at over 220 BILLION bucks. You don't see them doing a R/S just to get "fancy pantsed" with institutional investors. Institutional investors start looking at stocks at over 5 bucks. Edward Jones doesn't even have sub 5 dollar stocks on any of their lists.