this post was submitted on 14 Oct 2023
758 points (99.0% liked)

Technology

60101 readers
1909 users here now

This is a most excellent place for technology news and articles.

Our Rules

  1. Follow the lemmy.world rules.
  2. Only tech related content.
  3. Be excellent to each another!
  4. Mod approved content bots can post up to 10 articles per day.
  5. Threads asking for personal tech support may be deleted.
  6. Politics threads may be removed.
  7. No memes allowed as posts, OK to post as comments.
  8. Only approved bots from the list below, to ask if your bot can be added please contact us.
  9. Check for duplicates before posting, duplicates may be removed

Approved Bots

founded 2 years ago
MODERATORS
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
758
CEO Bobby Kotick will leave Activision Blizzard on January 1, 2024 | Schreier: Kotick will depart after 33 years, employees are "very excited." (arstechnica.com)
submitted 1 year ago by [email protected] to c/[email protected]
102 comments fedilink hide all child comments
 

CEO Bobby Kotick will leave Activision Blizzard on January 1, 2024 | Schreier: Kotick will depart after 33 years, employees are "very excited."::Schreier: Kotick will depart after 33 years, employees are "very excited."

you are viewing a single comment's thread
view the rest of the comments
[–] [email protected] 1 points 1 year ago (1 children)
  1. That’s not how stock splits are documented. The historical price per share is retroactively divided. Otherwise you’d see the share price suddenly drop by 50%…
  2. Market cap by itself is not an indicator of performance. If I invest $1 billion in a company and it’s worth $1.1 billion 10 years later, is that a better or worse return than investing $1 million in a company that’s worth $2 million 10 years later?
  3. I’m not a particularly big fan of GTA. I mentioned it because it’s the most profitable entertainment product ever created.
[–] Jakeroxs 1 points 1 year ago* (last edited 1 year ago) (1 children)

Nah because you're fundamentally misunderstanding what "investing 1 million" would mean after a stock splits happens.

I do this shit for a living lol

Also profit doesn't directly translate to a higher stock price, as there are various other aspects (rational and not rational) that can move a stock up or down.

Here's an example, using your invested a million starting point, for simplicity we'll say we bought in 1 share for $1 so we have 1m shares.

Price rises to $2, our position is now worth 2m, simple.

Stock does a 1:4 split, we now have 4m shares with a purchase price adjusted to $0.25 that is now trading at only $0.50 but our position is still worth $2m

Stock moves back up to $2 after some time, our position is now worth $8m

Another stock split 1:2 this time, putting us at 8m shares and stock price is back at $1, still $8m position.

Stock moves back up to $2 after some time, our position is now at $16m

On a chart it won't look like the stock has increased all that much, yes they do get adjusted for splits as you mentioned but that alone still doesn't really speak to how stock splits effect your gain/loss when held since they continue to grow at a faster rate, higher shares outstanding generally means harder stock price to move since it effects the market cap so much more.

[–] [email protected] 1 points 1 year ago

I understand stock splits completely, and I now see that you do too.

Looking at the charts again, they do not measure what I initially thought they did. I thought each line represented profit (investor profit, not company profit) as a percentage of the original investment. I did not realize that the lines to not meet at 0% at the earliest time all three stocks could be purchased on the market.