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I checked the FAQ and didn't see an answer to this one. I am new to investing and bought CSCO at 116 11/16. Shortly thereafter they announced a stock split. The news release said that anyone who owned stock as of 2/22 would recieve the split and they would distribute those shares on 3/23.

After reading the FAQ and some of the other message boards, I realize that this is not true. For example, if someone were to buy CSCO on 3/3, or any other date up through 3/23, they would still recieve the split as those who had shares prior to 2/22.

So why is it marketed to sound like there is a difference between when the split is anounced and when it actually splits?
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I've often wondered the same thing...

As I understand how some of the discount brokerages like Ameritrade or Etrade work (and I could be wrong) is that when I place a trade... The brokerage then credits my account with the shares. So if a "Buy By" date has been set for 3/14 and the split date is set for 3/29. And lets say that on 3/17 I buy shares @ $200 per, then the stock splits on 3/29 and lets say my shares don't split... Then I just got screwed out of a lot of money.

For some reason I think that there would be a line of lawyers waiting for me to sue either the broker or the company I bought shares with.

I don't see how the company can set a "Buy By" date and still sell stocks at the pre-split price with out splitting the shares. I could understand it if the company does not give you the split but does refund the differance.

From what I've heard, if you buy stock up to the day before the stock splits you will get the split.

Wanna be the test case?

G
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Since this question has been addressed many times, and to give the regulars a break, I will attempt to answer this:

As far as investors are concerned, only the split date is relevant. If you buy or sell before that date, you work with the pre-split price; after that date, it's the post-split price. That's all we really need to know.

If you still want to understand what the record date is all about, check out the following links:

http://boards.fool.com/Message.asp?id=1030057000175001&sort=id

http://invest-faq.com/articles/stock-split.html

Hope that helped,

blue
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Author: geroxx Number: of 584
Subject: Re: Difference between announcement and split da Date: 2/26/00 10:25 AM Email this to a Friend
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I've often wondered the same thing...

As I understand how some of the discount brokerages like Ameritrade or Etrade work (and I could be wrong) is that when I place a trade... The brokerage then credits my account with the shares. So if a "Buy By" date has been set for 3/14 and the split date is set for 3/29. And lets say that on 3/17 I buy shares @ $200 per, then the stock splits on 3/29 and lets say my shares don't split... Then I just got screwed out of a lot of money.


fortunately, you are wrong. If the stock splits at 2:40 on 3/29 and you buy it at 2:39:59, you will get the split.

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Please Quote the whole reply. Like this...

"As I understand how some of the discount brokerages like Ameritrade or Etrade work (and I could be wrong) is that when I place a trade... The brokerage then credits my account with the shares. So if a "Buy By" date has been set for 3/14 and the split date is set for 3/29. And lets say that on 3/17 I buy shares @ $200 per, then the stock splits on 3/29 and lets say my shares don't split... Then I just got screwed out of a lot of money.

For some reason I think that there would be a line of lawyers waiting for me to sue either the broker or the company I bought shares with.

I don't see how the company can set a "Buy By" date and still sell stocks at the pre-split price with out splitting the shares. I could understand it if the company does not give you the split but does refund the differance. "

Now please notice I was playing a little devils advocate. Like I stated in the post... I think there would be a long line of lawyers waiting for me to sue someone...

Now for a good question...

I was reading somewhere that some companies don't "split" their stocks (example... for a 2-1 split where you had 100 shares you would now have 200) they actually pay a cash payout for the split instead.

What would happen then? woould you get the payout even though you bought after "the last date"?

G


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