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07-29-2010, 09:20 PM #1
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
Sold- 10-14-08
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07-29-2010, 09:20 PM #2
[ame]http://www.youtube.com/watch?v=ROlDmux7Tk4[/ame]
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07-29-2010, 09:23 PM #3
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