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Video: What is a Stock Split?
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Sonus Networks provides networked solutions worldwide. Co. offers Session Border Controllers (SBCs) that address security and interworking requirements for small, medium, and large businesses, as well as regional and global communications service providers; Sonus GSX9000 Open Services Switch, which bridges IP and TDM networks by converting voice signal into Internet Protocol (IP) IP packets and transmitting those IP packets on a data network; and Sonus T7000 Intelligent Switching System, a class five end-office soft switch that provides residential and business voice services, as well as IP-IP multimedia processing engine services. Co. also provides Diameter Signaling Controller. According to our SONS split history records, SONS has had 2 splits. | |
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SONS (SONS) has 2 splits in our SONS split history database. The first split for SONS took place on October 10, 2000. This was a 3 for 1 split, meaning for each share of SONS owned pre-split, the shareholder now owned 3 shares. For example, a 1000 share position pre-split, became a 3000 share position following the split. SONS's second split took place on January 30, 2015. This was a 1 for 5 reverse split, meaning for each 5 shares of SONS owned pre-split, the shareholder now owned 1 share. For example, a 3000 share position pre-split, became a 600 share position following the split.
When a company such as SONS 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 SONS 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 SONS split history from start to finish, an original position size of 1000 shares would have turned into 600 today. Below, we examine the compound annual growth rate — CAGR for short — of an investment into SONS shares, starting with a $10,000 purchase of SONS, presented on a split-history-adjusted basis factoring in the complete SONS split history.
Growth of $10,000.00
Without Dividends Reinvested
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Start date: |
04/22/2014 |
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End date: |
11/28/2017 |
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Start price/share: |
$16.10 |
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End price/share: |
$7.83 |
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Dividends collected/share: |
$0.00 |
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Total return: |
-51.37% |
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Average Annual Total Return: |
-18.12% |
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Starting investment: |
$10,000.00 |
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Ending investment: |
$4,863.67 |
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Years: |
3.61 |
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Date |
Ratio |
10/10/2000 | 3 for 1 | 01/30/2015 | 1 for 5 |
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