Retail Descisions - RTD -(did I miss-off the EPIC)
28 Nov. 2005 share jump today is nothing more than a consolidation......be warned when you want to sell your Shares...
/
I fail to understand why companies are allowed to pull this stunt.....it adds no value to the company, yet must take up valuable time....... cost of consultants and advisors.............

My limited experience is that they always round down the shareholding. I have no idea what they do with the remaining part shares, if there are a large number of shareholders then:
Large Number * 0.49 (average rounding down) = Half a Large Number of shares taken out of shareholders hands

skg

The idea of a consolidation is to make the shares more attractive by bringing the share price into a range in which more people will be interested in it. Serious investors would not touch a penny share, also in part because of the spread which tends to be much higher. Increasing the share price will tend to decrease the spread and make the shares more liquid.

However, after a consolidation very often the share price will drop from the mathematically correct new price.

Normally the fractions of shares are aggregated, sold by the company and the proceeds retained (which in theory will benefit the shareholders by increasing asset value).

Kayak,
Thanks for the info, it is very hard not to be cynical.
Have you any idea what happens in a nominee account? I'm just curious.
skg

Good point. The nominee holding would show up as a single holding at the registrars and so the broker would end up with the sum of the fractional entitlements. They might decide to pay you the value, or they might round half the accounts up and the other half down, but would they ever decide to keep it all for themselves? :-)