I'm not concern with investors cost base, when it comes to a split, it doesn't really change unless you are reinvesting the dividend back into the stock. The part I don't like is the company having a bigger burdened increasing the yield in the future with more shares.
That's the whole point mark, geee! The more shares the less you can pay, and they don't split future shares they pay what they can afford. No where is there a double of div because there was no split.
Ben that's just not true, buddy. The future dividend increases will also be cut in half. 660M x $.04 increase = 1.3B x $.02 increase. It's a $26M increase both ways. If you're suggesting that the future increase would remain the same $.04 in both cases then I understand the argument, but that's not how I think it works. Future increases will be half of what they would have been sans the split.
All the measurements are relative the only reason for splitting a stock is to get the price down to where retail investors think it's "affordable". Ultimately it's irrelevant.
Actually, I am wanting 4 more days of this and then with some return of reality of where the true weaknesses are, and where the strength is. Along with support from Junes sales up date of May, April, and March, with earning season starting, I just wish like hell that every earnings season, didn't have to start with stupid Alcoa, what a f, u, company!
hydro, the company is definitely nearing a point where they traditionally split the stock, and one thing it does do, is show the public, that the company is feeling secure about future earnings and they can support a larger share base with future increases of dividends.
"My argument is splits are just a marketing devices that drive additional costs to the company"
That is all that I have been saying over and over!!! I am a bad writer but I can't be that bad!
The future burden for the company is all I'm concerned about when it comes to splits!
Where do you come up with this stuff? There are a lot of other metrics that go into the credit rating. EPS is important but it's again relative. The absolute value of the EPS is pretty much meaningless because it is dependent on the number of share outstanding. You can't use EPS to compare the credit worthiness of BRK vs GE vs Cat vs Greece. The rating agencies don't care about # shares outstanding they're interested in the absolute value of the profit and it's trend. They don't care if there is one owner, 660M or 5B. It just doesn't matter.
We're obviously not going to convince each other, otherwise so let's drop it.