Row 30058

Row ID: 30058 | Dataset Entry | Axioma AXP Content Repository

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This page contains data entry 30058 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

going for 100 to 200 is the same as going from 1 to 2 or 1000 to 2000.

Now there are arguments for a somewhat "affordable" share price if an investor has $500 to invest but your stock costs $2000 per share well unless they have access to a brokerage with fractional shares they cannot invest , and fractional shares are a somewhat recent feature that brokerages have added and even today not all brokerages support fractional shares

So the thought is if you price your stock at like $50 well even people who only can invest $200 can still buy your stock and keeping it affordable can maybe create a bit more demand for the stock as smaller investors may throw a few hundred at the stock and if lots of smaller investors do this it could make a bit of a difference . Or even the thought that "novice" investors may be drawn to it by the low share price, see penny stocks

Lots of people still do not quite understand stock valuations , many novice investors might think buying 100 shares of a $1 stock must be better then buying 1 share of $100. They may incorrectly think the stock might be "cheaper" and that having 100 shares of stock is better then having 1 share because well 100>1 so it must be better

Well $100=$100 so it doesn't matter, also the $1 stock may not be "cheaper" if you actually look at varous valuation methods like P/E or P/B or P/S or what ever finacial metric you want to use

However Buffett has argued the opposite many times, while a $50 stock may be more "affordable" to a small time investores it may make your stock more volital as these investors maybe just randomly buying and selling stock for fun or gambling short term, and as soon as the economy hits a hard spot the will all sell because they need money for food or rent what ever.

If your stock price is $2000 a share well lots of small wsb folks are not going to try to gamble with it, the people buying it may be buying it for the long term and that is benfitial

Edit

I should also mention however that an affordable stock price might be mainly diven by company stock grants to employees . Like maybe you want to give a 3% stock bonus to an employees. Well if your stock is priced at $2000 to get a full share your employee has to make like 67k. Usually these are rounded down so now even if you make 130k you still get 1 share. If your stock price is more affordable its easier to give out these grants

FieldValue
text going for 100 to 200 is the same as going from 1 to 2 or 1000 to 2000. Now there are arguments for a somewhat "affordable" share price if an investor has $500 to invest but your stock costs $2000 per share well unless they have access to a brokerage with fractional shares they cannot invest , and fractional shares are a somewhat recent feature that brokerages have added and even today not all brokerages support fractional shares So the thought is if you price your stock at like $50 well even …
label r/investing
dataType comment
communityName r/investing
datetime 2024-05-21
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Raw Record

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  "text": "going for 100 to 200 is the same as going from 1 to 2 or 1000 to 2000.\n\nNow there are arguments for a somewhat \"affordable\" share price if an investor has $500 to invest but  your stock costs $2000 per share well unless they have access to a brokerage with fractional shares they cannot invest , and fractional shares are a somewhat recent feature that brokerages have added and even today not all brokerages support fractional shares\n\nSo the thought is if you price your stock at like $50 well even people who only can invest $200 can still buy your stock and keeping it affordable can maybe create a bit more demand for the stock as smaller investors may throw a few hundred at the stock and if lots of smaller investors do this it could make a bit of a difference  . Or even the thought that \"novice\" investors may be drawn to it by the low share price, see penny stocks\n\nLots of people still do not quite understand stock valuations , many novice investors might think buying 100 shares of a $1 stock must be better then buying 1 share of $100. They may incorrectly think the stock might be \"cheaper\" and that having 100 shares of stock is better then having 1 share because well 100>1 so it must be better\n\nWell $100=$100 so it doesn't matter, also the $1 stock may not be \"cheaper\" if you actually look at varous valuation methods like P/E or P/B or P/S or what ever finacial metric you want to use\n\nHowever Buffett has argued the opposite many times, while a $50 stock may be more \"affordable\" to a small time investores it may make your stock more volital as these investors maybe just randomly buying and selling stock for fun or gambling short term, and as soon as the economy hits a hard spot the will all sell because they need money for food or rent what ever.\n\nIf your stock price is $2000 a share well lots of small wsb folks are not going to try to gamble with it, the people buying it may be buying it for the long term and that is benfitial\n\nEdit \n\nI should also mention however that an affordable stock price might be mainly diven by company stock grants to employees . Like maybe you want to give a 3% stock bonus to an employees. Well if your stock is priced at $2000 to get a full share your employee has to make like 67k. Usually these are rounded down so now even if you make 130k you still get 1 share. If your stock price is more affordable its easier to give out these grants",
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  "datetime": "2024-05-21",
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