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Author: TMFSelena Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2201  
Subject: Re: Charts and Stock Splits Date: 6/7/1999 9:49 AM
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<<I do not understand how splits are depicted on the wonderful charts I find here in TMF. I expect the share price to fall by half after a 2:1, but it never does. Could some Fool wiser than I please shed some light on what I am seeing? I feel like I've got the elephant's trunk, so I know elephants are long and slithery--I want to see the whole animal.>>

I think I can explain. Once a split occurs, a stock's current past prices are "adjusted." So if XYZ splits 2-for-1 today and last week it was trading at $84 per share, today when I look up its historical price last week, it'll be $42.

That's why you may hear reference to a stock trading in the past at "a split-adjusted $22." That means that at the time the price wasn't $22, but is now, once it's adjusted for splits.

This is also why a Fool chart showing past prices will appear relatively smooth, without 50% dropoffs whenever a 2-for-1 split occurred.

Does that help?

Selena
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