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International Investing / Australia (All-Ordinaries)


Subject:  Re: ARP-business as usual. Date:  8/20/2002  6:57 PM
Author:  harmy Number:  4886 of 6186

Is higher liquidity better?

I've also thought about this from time to time !! There is no doubt that a share split does increase liquidity but you have to ask what benefit this has for the company. After all when the equity is first issued and the company collects the capital to set up or enhance business it is then immaterial what happens to the share price after that point (apart from keeping the investors happy). Any increase in liquidity doesn't enhance the company's performance one iota.
Also for knowledgeable investors it is also immaterial how much a share is actually valued - look at BRK for example.

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