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  1. #1
    Senior Member rajiv1998's Avatar
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    Investment bankers inside please (No BS)

    So I am still kind of puzzled on a "stock split". I know what it is but had a quick question before I started my work.

    Lets say that I have a privatley owned company (Like the Donald). Now lets say that I have 100 investors and each share of stock is $50 per share. So then my market capitalization is $5000 (100x$50)
    Now lets say that I want more investors so I wanna split the stock. The original $50 per share is now cut in half to $25, and in order to keep the market capialization equal I will need 200 people (double the investors if I decided to cut the price of the stock in half). So now my market cap is still $5000 ($25x200)

    Now here is my question: If I have a private company, couldnt I regulate the amount of shares that I wanted? After 200 shares could I just stop and not take any more investors? I know a split stock is when you + or - the shares of your company while keeping the market cap even and unchanged. Im just a little lost because if I let more than 200 investors at $25 per share, the market cap wont equal $5000 and it wont be considered a split stock.

    Sorry if this is a bit much. I need to submit this thing in before 10 am tommorow and didnt want to go to another board, make a name, ask the question etc... Any help is greatley appreciated. (sorry I might sound like a nerd)
    "Life is to short to drive a slow car"

    Gone but not forgoten: 1998 Pontiac Trans Am M6 "The Black Bandit"
    Bought- 11-18-05
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  2. #2
    Impounded 86 IROC-Z's Avatar
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    Everything fiberglass
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  3. #3
    Senior Member rajiv1998's Avatar
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    Quote Originally Posted by 86 IROC-Z View Post
    Seriously, I have to submit this in before 10am.

    Not gonna lie, that was funny

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