Share Price Appreciation

Discussion in 'Stock Market Forum' started by Vlad, Jan 7, 2020.

  1. Vlad

    Vlad New Member

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    At the start of the Microsoft company in 1986, the price of a Microsoft share is shown to have been around 10 cents.

    At the start of the Amazon company In 1997, the price of an Amazon share is shown to have been around 1.7 dollars.

    The current Microsoft share price is 158 dollars.

    The current Amazon share price is 1,874 dollars.

    At first, it might seem that a person who had bought one Amazon share in 1997 would have more money now than a person who had bought one Microsoft share in 1986. But I have read in the following link that the Microsoft company has split multiple times in its history, which explains why its share price is much lower than that of the Amazon company:

    quora.com/Why-is-the-price-of-Microsoft-stock-so-low

    I need to find answers to the following questions:

    1) If one person had bought one Microsoft share in 1986, whereas another person had bought one Amazon share in 1997, who would have more money now?

    2) Is it inadvisable to buy shares of a company which is going to split, as compared with a company which is not going to split?

    3) Does a person’s share automatically multiply by the number of times a company splits, so that if a person has 1 share, he will eventually have 9 shares if the company splits 9 times in its history?

    4) I want to buy a number of shares which are currently very inexpensive in a recently started company with the hope of seeing them appreciate significantly in the future. How would you recommend me to determine what new company to choose which may grow significantly?
     
  2. Chartman

    Chartman Senior Investor

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    Not sure about number 1.

    2. The reasons shares tend to split is because they are perceived to look more attractive at a lower price (all in the head really) but a split can also increase liquidity.

    3. It depends, some shares may split in 2, in 4, etc. You automatically receive split shares when it happens.

    4. What do you mean by "inexpensive"?
     
  3. Vlad

    Vlad New Member

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    Thank you for the information.
    I mean shares which can be only a few dollars worth at the beginning of a recently created company. But as the company grows, the share price can be expected to increase significantly or the company to split a number of times, resulting in the multiplying of shares.
     

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