peilthetraveler
Registered: Jun 2005
Posts: 7061 |
03-23-12 12:46 AM
Quote from shortbleu:
According to the company RPC.INC's website (Symbol RES), there was a three-for-two stocks split a few weeks ago.
The split was effected by issuing one additional share of common stock for every two shares of common stock held.
I bought 100 shares at $15 each (total value $1,500) just before the split.
Just after the split, my account shows I own 200 shares at $10 each (total value of $2,000).
I don't understand why the number of shares I own increased from 100 to 200 as the split is 3 for 2 and not 2 for 1.
I thought my account should show 150 shares at $10 each (same total value of $1,500)?
Why do I own 200 shares and not 150? I made an unrealised profit of USD 500 in the process but I don't understand why. I believe that in theory, stock splits should not create profit/loss as the increase in the number of shares should be compensated by the decrease in the price per share?
It's likely a computer error that happened in your favor. They will catch it eventually and deduct the money(shares) from your account.
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