Stock splits—will the confusion ever end?

I understand how stock splits, forward and reverse can confuse novice investors, but I was shocked to see Reuters Money publishing a guest post titled:  “An inside look at a bad stock trade.”   This investor’s analysis of VXX’s 4:1 reverse split was: “Such a split means that investors would have one-fourth of the shares they owned before the split, but at four times the price. In other words, it’s like taking 75 percent of your shares away and leaving you with less equity in what could be a sickly asset.”

It’s more like giving you a dollar bill for four quarters.

By the way, I think Barclays should take advantage of the recent volatility run up to reverse split VXX again.  It would get VXX’s price up near $100 and probably delay another reverse split for well over a year.   If they wait until contango has ground VXX down to $10 again, their price will only bump up to $40 to $50 per share.

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1 thought on “Stock splits—will the confusion ever end?”

  1. Hahaha oh man, this is too funny. I’ll go trade her 100$ bills for 50 bills of 1$, she’ll be pleased! 50 times more bills, what a deal!!!

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