Perhaps a preference for round numbers is part of the reason Nasdaq still has a minimum bid price of $1.00 per share; if the stock stays below that round level, it is eventually delisted. A reverse stock split to get off of the OTC "pink sheets" is one of the greatest sins for a publicly-listed company.
Prior to decimalization, stock prices had fractional elements 3/4, 1/2, 1/4, 1/8 (and towards the end, 1/16, or "teenies"). If a "penny stock" had a fractional price below $1, it was called a "drill bit" https://en.wikipedia.org/wiki/Drill_bit_sizes#Fractional-inch_drill_bit_sizes , a wonderfully derogatory term which works on two levels, as it evokes not only diminutive size, but conjurs the image of augering into the ground.
Wow, I know about the drill bits (I am that old...) but I did not know that Nasdaq has a $1.00 minimum share price. Fascinating, especially for a market that is full of penny stocks (at least if they were priced correctly).
Now, if a company does a reverse split that helps fix the share price but makes it fall out of compliance with these other requirements (market capitalization ($50 million minimum, shareholders' equity $50 million, number of publicly held shares 1.1 million minimum, minimum number of shareholders 400 round-lot holders), the NYSE prohibits it.
must mention the more famous and durable numerology ; retail investors preference for a low price-per-share stock. i maybe be recalling faultily this was once <$10, and influenced the naming of one of fidelity's most famous value fund?
would not be surprised to see 'low' inflation-adjusted shareprice and round numbers still work jointly on behavior.
Perhaps a preference for round numbers is part of the reason Nasdaq still has a minimum bid price of $1.00 per share; if the stock stays below that round level, it is eventually delisted. A reverse stock split to get off of the OTC "pink sheets" is one of the greatest sins for a publicly-listed company.
Prior to decimalization, stock prices had fractional elements 3/4, 1/2, 1/4, 1/8 (and towards the end, 1/16, or "teenies"). If a "penny stock" had a fractional price below $1, it was called a "drill bit" https://en.wikipedia.org/wiki/Drill_bit_sizes#Fractional-inch_drill_bit_sizes , a wonderfully derogatory term which works on two levels, as it evokes not only diminutive size, but conjurs the image of augering into the ground.
Decimalization doesn't appear to matter for intrinsically worthless assets. After all, $MELANIA trades for $0.3746 https://coinmarketcap.com/currencies/melania-meme/ ... and $DTJR for $0.00005473 https://coinmarketcap.com/currencies/donald-trump-jr/ .
Wow, I know about the drill bits (I am that old...) but I did not know that Nasdaq has a $1.00 minimum share price. Fascinating, especially for a market that is full of penny stocks (at least if they were priced correctly).
Earlier this year, the SEC tightened the rules even further, including a crackdown on using reverse splits to meet the $1.00 threshhold https://www.akerman.com/en/perspectives/sec-approves-changes-to-nyse-and-nasdaq-minimum-price-rules-what-public-companies-need-to-know.html .
Now, if a company does a reverse split that helps fix the share price but makes it fall out of compliance with these other requirements (market capitalization ($50 million minimum, shareholders' equity $50 million, number of publicly held shares 1.1 million minimum, minimum number of shareholders 400 round-lot holders), the NYSE prohibits it.
Let's see if those rules outlast the current administration, which seems to be perfectly fine with imaginary assets priced *well* to the right of the decimal point ;-) https://coincheckup.com/coins/official-eric-trump . The $MELANIA memecoin made exactly 24 wallets rich before it went down 95% https://www.profgmarkets.com/p/melania-coin-made-24-wallets-rich-then-crashed-95 .
Grifters gonna grift.
must mention the more famous and durable numerology ; retail investors preference for a low price-per-share stock. i maybe be recalling faultily this was once <$10, and influenced the naming of one of fidelity's most famous value fund?
would not be surprised to see 'low' inflation-adjusted shareprice and round numbers still work jointly on behavior.