Effect On Historical Charts
When a stock splits, many charts show it similarly to a dividend payout and therefore do not show a dramatic dip in price. Taking the same example as above, a company with 100 shares of stock priced at $50 per share. The company splits its stock 2-for-1. There are now 200 shares of stock and each shareholder holds twice as many shares.
The price of each share is adjusted to $25. Based on this example you might expect to see the stock dropping from $50 to $25.
So what is done is something called adjusted close price. This adjusted close price will take all the closing prices before the split and divide them by the split ratio. So when you look at the charts it will seem as if the price was always $25. Both the Yahoo! historical price charts and the Google historical price charts show the adjusted close prices.
Read more about this topic: Stock Split
Famous quotes containing the words effect on, effect, historical and/or charts:
“The use of symbols has a certain power of emancipation and exhilaration for all men. We seem to be touched by a wand, which makes us dance and run about happily, like children. We are like persons who come out of a cave or cellar into the open air. This is the effect on us of tropes, fables, oracles, and all poetic forms. Poets are thus liberating gods.”
—Ralph Waldo Emerson (1803–1882)
“An actor must communicate his author’s given message—comedy, tragedy, serio- comedy; then comes his unique moment, as he is confronted by the looked-for, yet at times unexpected, reaction of the audience. This split second is his; he is in command of his medium; the effect vanishes into thin air; but that moment has a power all its own and, like power in any form, is stimulating and alluring.”
—Eleanor Robson Belmont (1878–1979)
“Yet the companions of the Muses
will keep their collective nose in my books
And weary with historical data, they will turn to my dance tune.”
—Ezra Pound (1885–1972)
“There’s one basic rule you should remember about development charts that will save you countless hours of worry.... The fact that a child passes through a particular developmental stage is always more important than the age of that child when he or she does it. In the long run, it really doesn’t matter whether you learn to walk at ten months or fifteen months—as long as you learn how to walk.”
—Lawrence Kutner (20th century)