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Video: What is a Stock Split?
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Georgia Gulf is a manufacturer and marketer of chemicals and building products. Co.'s chlorovinyls segment consists of two product groups: electrovinyls products, which are composed of chlorine, caustic soda, ethylene dichloride, vinyl chloride monomer, and vinyl resins; and compound products, which are composed of vinyl compounds, compound additives and plasticizers. Co.'s building products segment consists of two product groups: window and door profiles and mouldings; and outdoor building products, which consists of siding, pipe and pipe fittings and deck, fence and rail products. Co.'s aromatics segment also contains two commodity chemical product groups: cumene; and phenol and acetone. According to our GGC split history records, GGC has had 2 splits. | |
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GGC (GGC) has 2 splits in our GGC split history database. The first split for GGC took place on January 27, 1989. This was a 2 for 1
split, meaning for each share of GGC 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. GGC's second split took place on July 29, 2009. This was a 1 for 25 reverse split, meaning for each 25 shares of GGC owned pre-split, the shareholder now owned 1 share. For example, a 2000 share position pre-split, became a 80 share position following the split.
When a company such as GGC 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 GGC 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 GGC split history from start to finish, an original position size of 1000 shares would have turned into 80 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into GGC shares, starting with a $10,000 purchase of GGC, presented on a split-history-adjusted basis factoring in the complete GGC split history.
GGC -- use the split history when considering split-adjusted past price performance. |
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Date |
Ratio |
01/27/1989 | 2 for 1
| 07/29/2009 | 1 for 25 |
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