Thursday, August 16, 2012

Coca-Cola 2 for 1 Split

Coca-Cola's 2 for 1 stock split finally went through this past Friday, August 10th. Of course this does nothing to the value of your position as it doubles the amount of shares you own but halves the value of the shares and, most important to me, the dividend. So everything is pretty much still status quo with it comes to KO. Management's thought process for the split was that it would unlock shareholder value since the shares were trading in the $60's when it was announced and traded up to the high $70's leading up to the split. By halving the share price, it's thought that more investors would get in seeing as how the stock is now cheaper. Of course we all know that's not true as the relative value is all the same. The stock split made KO my first investment that has returned over 1 full share in dividend reinvestments so far, although it's really at 0.796 shares instead of the 1.592.

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