Quote:
Originally Posted by Slava
You have it incorrect there. If the shares split at $100 you have 2000 shares then at $50/each. This is $100,000 both before and after the split.
If they rise to $100 after the split you have $200,000. If they had never split but went to $150 a share then you have $150,000 so it appears that you are ahead. The issue is that you are comparing different growth in the share price though. On a dollar-dollar basis it is the same, but as a percentage its half the growth.
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Is that first part true? I thought the strike price split as well?
look at it like this: with 1000 shares at $50 SP I owe my company $50,000 of whatever I sell
If the stocks split and I have 2000 at $50 I now owe my company $100,000 of whatever I sell? And since the price is now down to $50 I have NO profit because of one split.
I think you are mistaken, as 2000 SO at %25 SP is back to the original $50,000