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Video: What is a Stock Split?
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Ocwen Financial is a financial services company that services and originates both forward and reverse mortgage loans, through its primary brands, PHH Mortgage and Liberty Reverse Mortgage. Co. provides solutions through its primary operating, wholly-owned subsidiary, PHH Mortgage Corporation. Co. has the following segments: Servicing, in which Co.'s Servicing business is primarily comprised of its residential forward mortgage servicing business; and Originations, in which Co. originates and purchases residential mortgage loans that it sells to agencies or securitize on a servicing retained basis, thereby generating mortgage servicing rights. According to our OCN split history records, Ocwen Financial has had 3 splits. | |
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Ocwen Financial (OCN) has 3 splits in our OCN split history database. The first split for OCN took place on November 21, 1997. This was a 2 for 1
split, meaning for each share of OCN owned pre-split, the shareholder now owned 2 shares. For example, a 1000 share position pre-split, became a 2000 share position following the split. OCN's second split took place on August 10, 2009. This was a 166 for 100 split, meaning for each 100 shares of OCN owned pre-split, the shareholder now owned 166 shares. For example, a 2000 share position pre-split, became a 3320 share position following the split. OCN's third split took place on August 14, 2020. This was a 1 for 15 reverse split, meaning for each 15 shares of OCN owned pre-split, the shareholder now owned 1 share. For example, a 3320 share position pre-split, became a 221.333333333333 share position following the split.
When a company such as Ocwen Financial splits its shares, the market capitalization before and after the split takes place remains stable, meaning the shareholder now owns more shares but each are valued at a lower price per share. Often, however, a lower priced stock on a per-share basis can attract a wider range of buyers. If that increased demand causes the share price to appreciate, then the total market capitalization rises post-split. This does not always happen, however, often depending on the underlying fundamentals of the business. When a company such as Ocwen Financial conducts a reverse share split, it is usually because shares have fallen to a lower per-share pricepoint than the company would like. This can be important because, for example, certain types of mutual funds might have a limit governing which stocks they may buy, based upon per-share price. The $5 and $10 pricepoints tend to be important in this regard. Stock exchanges also tend to look at per-share price, setting a lower limit for listing eligibility. So when a company does a reverse split, it is looking mathematically at the market capitalization before and after the reverse split takes place, and concluding that if the market capitilization remains stable, the reduced share count should result in a higher price per share.
Looking at the OCN split history from start to finish, an original position size of 1000 shares would have turned into 221.333333333333 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into Ocwen Financial shares, starting with a $10,000 purchase of OCN, presented on a split-history-adjusted basis factoring in the complete OCN split history.
Growth of $10,000.00
Without Dividends Reinvested
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Start date: |
04/25/2014 |
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End date: |
04/23/2024 |
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Start price/share: |
$558.30 |
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End price/share: |
$24.77 |
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Dividends collected/share: |
$0.00 |
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Total return: |
-95.56% |
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Average Annual Total Return: |
-26.76% |
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Starting investment: |
$10,000.00 |
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Ending investment: |
$443.72 |
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Years: |
10.00 |
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Date |
Ratio |
11/21/1997 | 2 for 1
| 08/10/2009 | 166 for 100 | 08/14/2020 | 1 for 15 |
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