North American IT (NAIT) - share split notification 5:1

[monabri]

"The North American Income Trust plc has announced that at the forthcoming AGM, the Board will propose an ordinary resolution to sub-divide the existing Ordinary shares (currently with a nominal value of 25 pence each) into new Ordinary shares of 5 pence each.


Each Shareholder will hold the same proportionate interest in the Company following the completion of the share split as before. The Company`s AGM will be held at 2.00 pm on 4 June 2019 at 1 George Street, Edinburgh, EH2 2LL.


Terms: Each Existing Ordinary Share of 25p will be split into 5 New Ordinary Shares of 5p each


If approved at the meeting the new Shares are expected to be credited on 10/06/19"

[chineplate]

Thanks for the news

[Nocton]

I shall vote against. It's just more hassle to keep up one's records and I don't believe a price of around £15 is too rich. It just makes it look like a quality share/product reflecting its steady progress over the years.

[barchid]

I think you are quite correct.
Why split, no real reason as far as I can see & it has been a great performer, quietly too.

[Lootman]

I shall vote against.It's just more hassle to keep up one's records and I don't believe a price of around £15 is too rich. It just makes it look like a quality share/product reflecting its steady progress over the years.

I think you are quite correct. Why split, no real reason as far as I can see & it has been a great performer, quietly too.

There is rarely a good reason for a split (or for its rarer cousin - a reverse split).

In the old days commissions were charged as an amount per share, so it was cheaper to buy shares with a high nominal value. Now that commissions are either a percentage or a flat fee, that's not relevant.

A high share price is seen by some as a sign of success and prestige, particularly in the US where nominal share prices tend to be much higher. Berkshire is perhaps the most extreme example of that and has never split, although "cheaper" B shares were created.

So why split? Well, shares with options listed on them have contracts priced for 1,000 shares and that can be difficult to gain liquidity. One reason the BRK B shares were created was to improve option liquidity. But that is hardly an issue in this case.

Maybe as an IT it runs a lot of DRIP and regular savings plans, and it's harder to buy shares if the share price is high, unless fractional shares are possible.

Amusingly, in the aftermath of the 2007-2009 bank crisis, the shares of some US bank shares actually did a reverse split. Shares priced under $5 in the US are deemed "junk" shares with different margin requirements. Citi and AIG both underwent reverse splits to make their nominal share price look respectable again

[XFool]

I think you are quite correct.
Why split, no real reason as far as I can see & it has been a great performer, quietly too.

One possible reason could be the Aberdeen share plan. Dividend reinvestment in this is executed strictly on dividends, which invariably leaves a fractional amount of cash left over. This accumulates with time and is not used in the next dividend reinvestment. So cash has to be transferred out of the account or used up in a separate lump sum investment. The higher the share price the more fractional cash left over each time.

[DavidM13]

Whatever the reason its invariably annoying as often it causes the data providers issues with crazy numbers or spikes in charts! There are adjustments to histories of mid/bid/last close prices, 4 sets of NAVs, EPS, Dividends, shares and treasury shares o/s, volume stats and probably a few others that I have forgotten. It is always a mad rush trying to get it all in and recalculate. So I would always keep my eyes peeled the day after a stock split so I don't end up buying something on an imaginary 300% discount or some such

[monabri]

Happened today!